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Question - Evaluate the purchase of an existing 500 unit apartment complex for $20000000, the building is assumed to have a 20 year functional life. Treat the rents as being collected at the end of each year, along with associated variable and fixed costs. Assume rent controls will prohibit the rent from being raised over the life of the building. Assume that the underlying property reverts to the original owners at the end of twenty years, and that you will also be responsible for demolition and clean-up costs, to be incurred at the end of the building's life. Rentals are estimated at 450 units per year. Each unit will be rented for a cumulative monthly amount of $20000 per year. Cost per unit when rented $8000 per year. Fixed costs $3000000 per year for the building, other than the initial investment. Demolition/Clean up $4500000 after-tax. Depreciation is to be straight-line. Assume the project can be financed at 8% (before-tax) using debt. Tax Rate is 21%. Develop a pro forma income statement and compute the after-tax operating cash-flow (OCF). Suppose your firm uses the NPV rule in making investment decisions and your after-tax OCF is $2700000. Assume same full debt funding at 8%, tax rate is 21%, 20 year period, straight-line depreciation, initial investment of $20000000 and after-tax exit cost of $4500000. What will be the before-tax OCF?
Events related to the acquisition, use and deposal of a tangible plant asset: straight-line depreciation Sam’s Subs purchased a delivery van on January 1,2013 for $35,000. In addition, Sam’s paid sales tax and title fees of $1500 for the van. The van..
What is the carrying value of the securities on December 31, 2020 on Dickinson's balance sheet. No sales occurred during 2020
What are the pros and cons of ratio, vertical, and horizontal analysis. What do they tell us? Why do we need so many different methods?
If the firm increases its average age of inventory by 10 days and reduces its average age of receivable by 12 days, the annual savings is?
Frank and Molly met for the first time at a party on May 1,2015. and were married on June 1,2015. On June 8, 2015 they acquired a new home at a total cost of $550,000. Frank's first wife died 17 years ago. What is Molly's realized and recognized gain..
If Fauji Fertilizer have access cash of Rs. 32 million, debt of Rs. 280 million, and 40 million, what should be the expected share price of Fauji Fertilizer?
Case 1. You have finally saved $10,000 and are ready to make your first investment. You have the three following alternatives for investing that money: • Capital Cities ABC, Inc. bonds with a par value of $1,000 and a coupon interest rate of 8.75 per..
Swifty sells the bonds for $67,369. Prepare Swifty's journal entry for any adjusting entry needed at December 31
In? addition, Paymaster must maintain a minimum, If Paymaster plans to borrow ?120,000 for a period of 4 ?months, what is the annualized cost of the bank? loan?
What is Gregson's ending inventory using absorption costing? Determine the earnings per share for 2008 if its net income is $175,000.
Which of the following is an example of the management activity referred to as planning?
How indications of impairment might be recognised. Which would be external indicators that one or more of an entity's assets mat be impaired
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