Question: A developer owns a vacant site for which he recently paid $1,000,000. He intends to develop a 15,000 sq. ft. building which will cost

A developer owns a vacant site for which he recently paid $1,000,000.

A developer owns a vacant site for which he recently paid $1,000,000. He intends to develop a 15,000 sq. ft. building which will cost a total of $110 per sq. ft. to build (hard and soft costs excluding land). What will the value of the property have to be (rounded to the nearest $10,000) once it is completed and leased if the developer's investors require an 8.0% return

Step by Step Solution

★★★★★

3.55 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

To calculate the value of the property once it is completed and leased we need to determine the total cost of development and then calculate the value based on the required return rate of the investor... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Students Have Also Explored These Related Finance Questions!

Find the function's f (x) = x+3x-5 value of the difference quotient when x = 2. What is the value of the quotient when h = 0?

Managing Scope Changes Case Study Scope changes on a project can occur regardless of how well the project is planned or executed. Scope changes can be the result of something that was omitted during...

You have found a vacant plot of land for sale which you believe wouldbe a good site for an apartment building. You want to put in a bid and you want to ensure that your bid is the maximum possible....

A developer owns a vacant site for which he recently paid $ 1 , 0 0 0 , 0 0 0 . He intends to develop a 1 5 , 0 0 0 sq . ft . building which will cost a total of $ 1 1 0 per sq . f t . to build (...

A developer owns a vacant site for which he recently paid $ 1 , 0 0 0 , 0 0 0 . He intends to develop a 1 5 , 0 0 0 sq . ft . building which will cost a total of $ 1 1 0 per sq . ft . to build ( hard...

Compute these ratios for each of the last three years. Total Assets Turnover Ratio=sales (or operating) revenue/Average total assets Return on Assets= Net earnings+Interest expense(net of...

Which of the five CPRs should Doug Scovanner accept? Be prepared to explain how each of the considerations that follow influenced your decision: (Please Give Explanation and COMPUTATION) a.NPV and...

I can't figure out why my assets don't equal my liabilities + owners equity. for some reason when I have 1 entry for common shares (100,000) and 1 entry for investment ($100,000) -- both in owners...

A firm reports book value of shareholders equity of $850 million with 25 million shares outstanding. Those shares trade at $45 each in the stock market. An analyst values the equity by following the...

What are the possible marketing consequences of not having an effective search engine optimization strategy?

Sales revenue $ 3 5 0 , 1 0 0 Cost of goods sold $ 1 4 2 , 0 0 0 Fixed costs $ 4 3 , 0 0 0 Selling, general, and administrative expenses $ 2 8 , 1 0 0 Depreciation $ 4 6 , 1 0 0 ( Click on the...

Read Frank Abagnales book, Catch Me If You Can. Prepare a report on the nature and level of complexity of his fraudulent schemes. What, in your opinion, made them so successful?

Is there a relationship between a students GPA and the number of pencils in his or her backpack? Jordynn and Angie decided to find out by selecting a random sample of students from their high school....

Your client, Alternate Fuel, Inc. (a regular corporation), owns three sandwich shops in the Philadelphia area. In 2016, the year Alternate Fuel incorporated, it acquired land on the outskirts of...

Liquid water is heated, so it becomes superheated vapor. Can specific heat be used to find the heat transfer? Explain.

The return of goods to the supplier will affect the purchase account. Question 27Answer True False

What is a cost object? Give three examples.

Discuss why an incentive package might include individual, divisional and corporate-level performance targets.

Energy plays an important role in improving peoples lifestyles. In Australia, our energy consumption is growing and is forecasted to increase by 50 per cent over the next 15 years. The available...

4. Correlate brain anatomy with behavior. Do people with some unusual behavior also have unusual brains? If so, in what way?

19. What does fMRI measure?

23. Why do recent studies show a stronger relationship between brain size and IQ than older studies did?