How does the estimate differ if the discount rate is given

Assignment Help Microeconomics
Reference no: EM132276392

Question: 1. Suppose you are assigned to assess a 50,000-square-foot office building that currently is fully leased at $10 per square foot. The owner's annual costs of operation for the building (interest, maintenance, insurance) are $400,000. The building is 10 years old and is expected to have an additional 20 years of useful life. Assuming these market conditions will continue, estimate the current market value of the building under the income approach if the discount rate is 10 percent. How does the estimate differ if the discount rate is 5 percent?

2. "If one city lowers property taxes, then most of the benefit will go to landowners in that city when taxes were reduced." Evaluate this statement in terms of economics by analyzing first the effects of the tax decrease on the amount of capital in the city and then on the markets for land, labor, and housing in the city. Under what conditions is the statement correct?

Reference no: EM132276392

Questions Cloud

State the general conditions for short-run equilibrium : State the general conditions for short-run equilibrium and for long-run equilibrium. Which one implies the other? Note: "general" means not just.
Reflect on the overall complexity of criminal justice : Criminal justice organizations are numerous and operate at all levels of government. They are also complex in nature, both operationally and administratively.
What will be the firm current ratio and debt ratio : If her estimates are correct, what will be the firm's current ratio and debt ratio? Explain the meaning of these ratios
Describe lethal option that are available to law enforcement : Identify and describe at least 1 new less-than-lethal or nonlethal technology that is currently under development.
How does the estimate differ if the discount rate is given : Suppose you are assigned to assess a 50,000-square-foot office building that currently is fully leased at $10 per square foot. The owner's annual costs.
Determine administration of criminal justice organizations : Environmental or external factors often influence the management and administration of criminal justice organizations.
Develop decision-making process in detail : Scenario: Consider your last big purchase such as a car, appliances, home repairs, home purchase, computer equipment, college tuition, or another "big-ticket".
Discussion about the forensic evidence collection : There is a difference between arson against property and arson again a specific individual.
How variables can affect the demand for your product : Discuss how these variables can affect the demand for your product or industry and what methods could be used to estimate the effect of these variables.

Reviews

Write a Review

Microeconomics Questions & Answers

  The free rider problem

Question: Explain why the free rider problem makes it difficult for perfectly competitive markets to provide the Pareto efficient level of a public good.

  Failure of the super committee is good thing for economy

Some commentators have argued that the failure of the “Super committee” is good thing for the economy?  Do you agree?

  Case study analysis about optimum resource allocation

Case study analysis about optimum resource allocation: -  Why might you suspect (even without evidence) that the economy might not be able to produce all the schools and clinics the Ministers want? What constraints are there on an economy's productio..

  Fixed cost and vairiable cost

Questions:  :   Which of the following are likely to be fixed costs and which variable costs for a chocolate factory over the course of a month?  Explain your choice.

  Problem - total cost, average cost, marginal cost

Problem - Total Cost, Average Cost, Marginal Cost: -  Complete the following table of costs for a firm.  (Note: enter the figures in the  MC   column  between  outputs of  0 and 1, 1 and 2, 2 and 3, etc.)

  Oligopoly and demand curve problem

Problem based on Oligopoly and demand curve,  Draw and explain the demand curve facing each firm, and given this demand curve, does this mean that firms in the jeans industry do or do not compete against one another?

  Impact of external costs on resource allocation

Explain the impact of external costs and external benefits on resource allocation;  Why are public goods not produced in sufficient quantities by private markets?  Which of the following are examples of public goods (or services)? Delete the incorrec..

  Shifts in demand and movements along the demand curve

Describe the differences between shifts in demand and movements along the demand curve. What are the main factors which can shift the demand curve? Explain why they cause the demand curve to shift. Use examples and draw graphs to support your discuss..

  Article review question

Article Review Question: Read the following excerpts from the article "Fruit, veg costs surge' by Todd, Dagwell, published in the Herald on January 25th 2011 and answer questions below:

  Long-term growth, international trade & globalization

Long-term Growth, International Trade & Globalization:- This question deals with concepts such as long-term growth, international trade and globalization. Questions related to trade deficit, trade surplus, gains from trade, an international trade sce..

  European monetary union (emu) in crisis

"Does the economic bailout of Spain and Greece spell the beginning of the end for the European Monetary Union (EMU)?"

  Development game “settlers of catan”

Read the rules of the game, the overview and the almanac for the Development Game "Settlers of Catan"

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