Already have an account? Get multiple benefits of using own account!
Login in your account..!
Remember me
Don't have an account? Create your account in less than a minutes,
Forgot password? how can I recover my password now!
Enter right registered email to receive password!
Edward Seymour is a financial consultant to Cornish, Inc., a real estate firm. Cornish Inc. finances and develops commercial real estate such as office buildings and warehouses. The completed projects are then sold as limited partnership interests to individual investors. The real estate firm makes a profit on the sale of these partnership interests. Edward provides financial information for the offering prospectus, which is a document that provides the financial and legal details of the limited partnership offerings. In one of the projects, the bank has financed the construction of a commercial office building at a rate of 10% for the first four years, after which the rate jumps to 15% for the remaining 20 years of the mortgage. The interest costs are one of the major ongoing costs of a real estate project.
Edward has reported prominently in the prospectus that the break-even occupancy for the first four years is 65%. This is the amount of office space that must be leased to cover the interest and general upkeep costs over the first four years. The 65% break-even is very low and thus communicates a low risk to potential investors. Edward uses the 65% break-even rate as a major marketing tool in selling the limited partnership interests. Buried in the fine print of the prospectus is additional information that would allow an astute investor to determine the break-even occupancy will jump to 95% after the fourth year because of the contracted increase in the mortgage interest rate. Edward believes prospective investors are adequately informed as to the risk of the investment.
Is Edward wrong? Is there an ethical concern? Is Edward a savvy business person? Discuss the position Edward is in and support or defend the position. Shouldn't all investors complete their own due diligence? The information is included in the prospectus, isn't this just business?
Follow the minimum requirements for discussion board posts located in the general discussion area. Recall, those are the minimum requirements, more posts are always encouraged.
Who has to comply with accounting standards? How is this determined and where can I find accounting standards?
calculation of cash and cash equivalents with given information.as of december 31 2009 tulip company has 16920 cash in
Harcourt Manufacturing (HM) has the capacity to produce 10,000 fax machines per year. HM currently produces and sells 7,000 units per year. HM currently leases its excess capacity for a rental fee of $12,000. The fax machines normally sell for $100 e..
Matthew Huber borrowed $20,000 at an 18% annual rate of interest. He determines that the loan is to be repaid over 3 years. The loan is amortized into three annually equal end-of-the-year payments. Calculate Matthew’s annual end-of-year loan payments
assume that a company sold a delivery van that had been used in the business for three years. records of the company
Depreciation expense on the building for the year was $60,000. Because the building was increasing in value during the year, the controller decided to charge the depreciation expense
Cost of Goods Sold and Merchandise Available for Sale in a Merchandising Company. Dash Department Store features women's fashions. At the beginning of the year, the store had $531,400 in merchandise. Total purchases for the year were $475,200. What w..
corning howell reported taxable income in 2009 of 120 million. at december 31 2009 the reported amount of some assets
A company must account for a contract modification as a new contract if
The per-unit standards for direct materials are 2 gallons at $3 per gallon. Last month, 5,600 gallons of direct materials that actually cost $16,200 were used to produce 3,000 units of product. What was the direct materials quantity variance for last..
What the original cost of the machine was. What depreciation method is apparently being used. Explain your answer. When the machine was acquired.
Does FAS 157 provide any transition relief for valuations previously prepared using entity-specific assumptions?
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!
whatsapp: +1-415-670-9521
Phone: +1-415-670-9521
Email: [email protected]
All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd