An Investor is considering the purchase of an existing suburban office building approximately five years old....
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
An Investor is considering the purchase of an existing suburban office building approximately five years old. The building, when constructed, was estimated to have an economic life of 50 years, and the building-to-value ratio was 80 percent. Based on current cost estimates, the structure would cost $5 million to reproduce today. The building is expected to continue to wear out evenly over the 50-year period of its economic life. Estimates of other economic costs associated with the Improvement are as follows: Repairable physical depreciation Functional obsolescence (repairable) Functional obsolescence (nonrepairable) $ 354,000 to repair $ 236,000 to repair $ 29,500 per year rent loss The land value has been established at $1 million by comparable sales in the area. The Investor believes that an appropriate opportunity cost for any deferred outlays or costs should be 12 percent per year. Required: What would be the estimated value for this property? (Do not round Intermediate calculations. Round your final answer to the nearest dollar amount.) An Investor is considering the purchase of an existing suburban office building approximately five years old. The building, when constructed, was estimated to have an economic life of 50 years, and the building-to-value ratio was 80 percent. Based on current cost estimates, the structure would cost $5 million to reproduce today. The building is expected to continue to wear out evenly over the 50-year period of its economic life. Estimates of other economic costs associated with the Improvement are as follows: Repairable physical depreciation Functional obsolescence (repairable) Functional obsolescence (nonrepairable) $ 354,000 to repair $ 236,000 to repair $ 29,500 per year rent loss The land value has been established at $1 million by comparable sales in the area. The Investor believes that an appropriate opportunity cost for any deferred outlays or costs should be 12 percent per year. Required: What would be the estimated value for this property? (Do not round Intermediate calculations. Round your final answer to the nearest dollar amount.)
Expert Answer:
Posted Date:
Students also viewed these finance questions
-
Adrian Webb bought 618 bricks to build a barbecue pit, paying $185.40. Find the cost per brick. (HINT: Cost per brick means the cost for one brick.) The cost per brick is s (Round to nearest hundidth)
-
The standard cost card for the single product manufactured by Cutter, Inc., is given below: Manufacturing overhead is applied to production on the basis of standard direct labor-hours. During the...
-
Between 5:00 PM and 6:00 PM, cars arrive at McDonald's drive-thru at the rate of 20 cars per hour. The following formula from probability can be used to determine the probability that x cars will...
-
In 2006, CKX, Inc., a New York sports entertainment company, paid \($50\) million for an 80 percent ownership interest in G.O.A.T. LLC. (G.O.A.T. stands for Greatest of All Time and is a business...
-
On January 2, 2011, Joshon Hardware Company traded with a dealer an old delivery truck for a newer model. Data relative to the old and new trucks follow: Old truck: Original cost . . . . . . . . . ....
-
A company is expecting a period of intense growth and has decided to retain more of their earnings to help finance that growth.As a result, the company is going to reduce the annual dividend by...
-
How to Write out the sample space for a family with five children? What is the probability that a family with five children will have a) Exactly three boys? b) At least three boys? What are the odds...
-
For the tank and water system of problem 30, how fast can we spin the tank before the bottom surface of the tank is exposed? How fast can we spin the tank before water reaches the rim? Problem 30 :...
-
An open, cylindrical tank of height $0.25 \mathrm{~m}$ is partially filled with water. The depth of the water is $0.1 \mathrm{~m}$, the diameter of the tank is $0.5 \mathrm{~m}$. If the tank is...
-
We are interested to produce $P$ in the reaction $A ightarrow P$ using a continuous reactor at $v=240$ liters/ hr with $C_{A_{0}}=3$ moles/liter. However, it is noticed that there is a second...
-
An astronomer wishes to determine the relative heights of the intensity peaks for the bright fringes produced by two wavelengths of radiation emitted by sodium atoms. The wavelengths are \(589.0...
-
A magnifying glass that has a focal length of \(0.25 \mathrm{~m}\) and a diameter of \(0.10 \mathrm{~m}\) is used to focus light of wavelength \(623 \mathrm{~nm}\). (a) What is the radius of the...
-
exp be equal to the focal length of the lens. he Let us see an example Example 6 An electric lamp and a screen are placed on the table, in a line at a distance of Im. In what positions of convex lens...
-
The liquidliquid extractor in Figure 8.1 operates at 100F and a nominal pressure of 15 psia. For the feed and solvent flows shown, determine the number of equilibrium stages to extract 99.5% of the...
-
Consider again Example 9.4, where we used a softmax output function \(S_{L}\) in conjunction with the cross-entropy loss: \(C(\boldsymbol{\theta})=-\ln g_{y+1}(\boldsymbol{x} \mid...
-
Consider again the Pytorch code in Section 9. 5.2. Repeat all the computations, but this time using the momentum method for training of the network. Comment on which method is preferable: the...
-
Consider again the Python implementation of the polynomial regression in Section 9.5.1, where the stochastic gradient descent was used for training. Using the polynomial regression data set,...
Python Programming For Beginners Easy Coding Crash Course 1st Edition - ISBN: B08QRXT5P8 - Free Book
Study smarter with the SolutionInn App