A property is expected to generate $450,000 of net operating income over the next 12 months. Discussion
Fantastic news! We've Found the answer you've been seeking!
Question:
A property is expected to generate $450,000 of net operating income over the next 12 months. Discussion with lenders leads to the conclusion that the minimum acceptable debt coverage ratio will be 1.20 and that loan terms will be 5 percent per annum, with 20-year amortization (monthly payments).
a. What is the maximum supportable annual debt service?
b. What size loan does this imply?
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
A real estate investment of $5,000,000 is expected to generate an NOI of $600,000 per year and will be resold at a cap rate of 8 % in 3 years. If the available financing is $3,000,000 at 6% with no...
-
A risky $30,000 investment is expected to generate the following cash flows: The probability of receiving each cash inflow is 90, 80, and 70 percent, respectively. If the firms cost of capital is 12...
-
A risky $400,000 investment is expected to generate the following cash flows: a. If the firms cost of capital is 10 percent, should the investment be made? b. An alternative use for the $400,000 is a...
-
Define the necessary and sufficient condition for two transactions to be serialisable. Give an example of a non-serialisable execution of a pair of transactions. [3 marks] (c) Define the necessary...
-
The Portland Sea Dogs, the AA affiliate of the Boston Red Sox major league baseball team, have enjoyed a surge in popularity. During a recent home stand, suppose the club offered $5 off the $12...
-
The motor at B winds up the cord attached to the crate of weight W with a constant speed. Determine the force in cord CD supporting the pulley and the angle θ for equilibrium. Neglect the size...
-
Repeat Problem 15.H1, but bulb 1 at \(\mathrm{z}=0\) contains the following mole fractions: \(\mathrm{y}_{\text {air }}\) \(=0.520, \mathrm{y}_{\mathrm{H} 2}=0.480\), and \(\mathrm{y}_{\mathrm{NH}...
-
During 2016, the Tastee Partnership reported income before guaranteed payments of $92,000. Stella owns a 90% profits interest and works 1,600 hours per year in the business. Euclid owns a 10% profits...
-
What's the rate of return you would earn if you paid $3,780 for a perpetuity that pays $85 per year? a. 1.12% b. 4.60% Oc. 4.50% Od. 2.25% e. 2.30%
-
Charles Whyte commenced business on May 1 2019, making up his accounts to September 30 annually. The statement of the Profit or Loss Account for the first 17 months ended September 30,2020 is as...
-
Define a type I error. A B The failure to reject a false null hypothesis. The acceptance to reject a null hypothesis. C) Rejecting a true null hypothesis. D) Accepting a true null hypothesis.
-
Suppose that in the past, Canada and the United States were involved in a trade agreement whereby US softwood lumber consumers were able to purchase Canadian produced lumber. The initial demand and...
-
Before starting EM7.1, verify that QBO Inventory Tracking is turned on. Go to Gear icon > Account and Settings > Sales > Products and Services > Track quantity and price/rate On > Track inventory...
-
A resident individual has the following capital gains and losses for the year: Discount capital gain (before discount applied) $10,000 Capital loss $2,000 Carried-forward net capital loss of prior...
-
Emily Jackson (Social Security number 765-12-4326) and James Stewart (Social Security number 466-74-9932) are partners in a partnership that owns and operates a barber shop. The partnership's first...
-
Ch. 21 - Final Exam > Pg. 4- Course Final Exam GET $25 Colibri Real Estate X A large piece of ground is developed with lights, streets, and sewers. The subdivider wants to get it ready for building....
-
Suppose you estimate this series n=1 (-1)" n4 5 with a partial sum using the first 4 terms of the series. According to the Alternating Series Estimation Theorem, what is the upper bound for the...
-
For the following exercises, write the first four terms of the sequence. a n = 2 n 2
-
Geary Company had the following transactions: Apr. 15 Issued a \(\$ 6,000,60\)-day, eight percent note payable in payment of an account with Marion Company. May 22 Borrowed \(\$ 50,000\) from...
-
The Longo Corporation issued \(\$ 50\) million maturity value of six percent coupon rate bonds, with interest paid semiannually. At the time of the bond issuance, equivalent risk-rated debt...
-
At December 31, 2017, Seattle Corporation had two notes payable outstanding (notes 1 and 2). At December 31, 2018, Seattle also had two notes payable outstanding (notes 3 and 4). These notes are...
Study smarter with the SolutionInn App