Explain the sales cost for the building

Assignment Help Finance Basics
Reference no: EM133114443

After graduation, you put together a proposal and managed to purchase a building downtown for $5 million and financed the acquisition with a 70 LTV interest-only loan. Three years later, you sold the property for $6 million. Assume 70% of the property was attributed to structure and that the structure was depreciated over a 40-year period. Also, assume that capital gains are taxed at 15% and that accumulated depreciation is taxed at 25%. Also, assume a 3% sales cost for the building and a 50 basis-point prepayment penalty for the loan. What would be your net profits?

Reference no: EM133114443

Questions Cloud

Calculate the davidson wacc using retained earnings : (1) Calculate the Davidson's WACC using Retained Earnings as the equity component cost.
Down payment and closing cost : a) Suppose you want to buy a new house. you currently have $25,000 and you figure you need to have a 10 percent downpayment plus an additional 5 percent of the
Observe the spot bb corporate rates : A lender is short on a 90-day FRA on the 180-day BB corporate bond yield. The agreed upon rate of the FRA contract is 15.7% and the notional amount is $500,000.
Earnings ratio to three comparable companies : You are analyzing a share by comparing its price/earnings ratio to three comparable companies in the industry. The share price and the forward earnings estimate
Explain the sales cost for the building : After graduation, you put together a proposal and managed to purchase a building downtown for $5 million and financed the acquisition with a 70 LTV interest-onl
Describe the major catalysts of the housing crisis : List and describe the major catalysts of the housing crisis in California and the United States.
Explain possible exit strategies : List and explain possible exit strategies and their relative advantages and disadvantages.
Explain the influence of increase in default correlation : Explain the influence of an increase in default correlation on (a) the risks in the equity tranche of an ABS and (b) the risks in the senior tranches of an ABS.
What is career planning : What is career planning? What is financial planning? What is career planning to do with financial planning. Explain building blocks to achieving success

Reviews

Write a Review

Finance Basics Questions & Answers

  What is the compound growth rate of dividends

What is the compound growth rate of dividends based on the last five years of dividends data?

  Problem regarding the lehman brothers debt

Impact of Lehman Brothers' Bankruptcy on individual wealth. Explain how the bankruptcy of Lehman Brothers (the largest bankruptcy ever) affected the wealth and income of many different types of individuals whose money was invested by institutional..

  What would be the interest of the loan

What would be the interest of the loan, if the loan amount is $1,000 at 5% simple interest for 3 years?

  Before completion of final accounts

The trial balance of M/s. J Ltd. on 31st March, 19x1 did not balance. The difference amount of Rs.76 was transferred to the credit of suspense account, and the accountant proceeded with the preparation of final account. Before completion of final acc..

  Various types of information systems

Conduct research online regarding the various types of information systems that are used to support e-business and e-commerce. Discuss the differences between customer relationship management, supply chain management, and electronic data interchan..

  What is meant by availability in logistics customer service

Compare and contrast speed, consistency, and flexibility as operational performance activities. In some situations, is one activity more critical than others?

  What is the amount of the firm disbursement float

In addition, the firm generally receives an average of $16,400 a day in checks. Deposited amounts are available after 2 days. What is the amount of the firm's disbursement float?

  What is q stock worth per share

What is Q's stock worth per share? (Do not round intermediate calculations. Round your answer to 2 decimal places.)

  What is the spot rate implied by these interest rates

If the current spot rate for the Swiss franc is $0.3985, what is the spot rate implied by these interest rates for the franc three years from now?

  What is the expected dividend per share

What is the expected dividend per share for each of the next 5 years? Round your answers to the nearest cent.

  Find highest number of pure cultures

Which environmental sample produced the highest number of pure cultures? Show your work (1 point) and provide the correct answer

  What transfer prices should be used by subsidiaries a and b

What transfer prices should be used by subsidiaries A and B when they charge subsidiary C?

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd