What is the annual rent per apartment unit

Assignment Help Accounting Basics
Reference no: EM132864273

Question - You are considering constructing a luxury apartment building project that requires an investment of $15,500,000. The building has 50 units. You expect the maintenance cost for the apartment building to be $350,000 the first year and $400,000 the second year, after which it will continue to increase by $50,000 in subsequent years. The cost to hire a manager for the building is estimated to be $85,000 per year. After five years of operation, the apartment building can be sold for $17,000,000.

What is the annual rent per apartment unit that will provide a return on investment of 15% after-tax? Assume that the building will remain fully occupied during the five years.

Reference no: EM132864273

Questions Cloud

Difference between perpetual and periodic inventory systems : Question - Please explain and discuss the difference between perpetual and periodic inventory systems with examples
Briefly explain the family takaful of tabarru model : Briefly explain the family takaful of Tabarru model.
Identify the settings for mental health promotion : Apply McCollum's model of mental health education. Describe the role of health educators and health promoters in mental health promotion
Describe what is meant by the disruptive innovation : Describe what is meant by the disruptive innovation? Include the textbook's example of this concept and provide examples
What is the annual rent per apartment unit : After five years of operation, the apartment building can be sold for $17,000,000. What is the annual rent per apartment unit
Elements of max weber model of bureaucracy : Describe the six elements of Max Weber's model of bureaucracy. Explain the four ways that managers can shape employees' behavior.
How does the culture of an organization come about : How does the culture of an organization come about, and how do ethics and values shape the culture of an organization? Is it possible to change the culture
Describe generalizability or transferability of research : Explain one recommendation you would make to improve the sampling plan of the study that would address these limitations in future research.
What is the precise payback period : Question - What is the precise payback period for the following set of cash flows

Reviews

Write a Review

Accounting Basics Questions & Answers

  How much control does fed have over this longer real rate

Hubbard argues that the Fed can control the Fed funds rate, but the interest rate that is important for the economy is a longer-term real rate of interest.   How much control does the Fed have over this longer real rate?

  Coures:- fundamental accounting principles

Coures:- Fundamental Accounting Principles: - Explain the goals and uses of special journals.

  Accounting problems

Accounting problems,  Draw a detailed timeline incorporating the dividends, calculate    the exact Payback Period  b)   the discounted Payback Period. the IRR,  the NPV, the Profitability Index.

  Write a report on internal controls

Write a report on Internal Controls

  Prepare the bank reconciliation for company

Prepare the bank reconciliation for company.

  Cost-benefit analysis

Create a cost-benefit analysis to evaluate the project

  Theory of interest

Theory of Interest: NPV, IRR, Nominal and Real, Amortization, Sinking Fund, TWRR, DWRR

  Liquidity and profitability

Distinguish between liquidity and profitability.

  What is the expected risk premium on the portfolio

Your Corp, Inc. has a corporate tax rate of 35%. Please calculate their after tax cost of debt expressed as a percentage. Your Corp, Inc. has several outstanding bond issues all of which require semiannual interest payments.

  Simple interest and compound interest

Simple Interest, Compound interest, discount rate, force of interest, AV, PV

  Capm and venture capital

CAPM and Venture Capital

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