You have the opportunity to purchase a small office building for $1,000,000. The seller has provided...
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You have the opportunity to purchase a small office building for $1,000,000. The seller has provided you with his most recent annual property accounting data. Revenues = $275,000; Utilities, repairs, insurance and management expenses = $110,000; Depreciation and amortization = $30,000; Real estate taxes = $55,000. You are interested in financing this acquisition with a $700,000 mortgage based on a 25 year amortization and a 8% annual fixed interest rate. What is the loan constant? You have the opportunity to purchase a small office building for $1,000,000. The seller has provided you with his most recent annual property accounting data. Revenues = $275,000; Utilities, repairs, insurance and management expenses = $110,000; Depreciation and amortization = $30,000; Real estate taxes = $55,000. You are interested in financing this acquisition with a $700,000 mortgage based on a 25 year amortization and a 8% annual fixed interest rate. What is the loan constant?
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To calculate the loan constant we need to determine the annual debt service wh... View the full answer
Related Book For
Auditing A Practical Approach with Data Analytics
ISBN: 978-1119401742
1st edition
Authors: Raymond N. Johnson, Laura Davis Wiley, Robyn Moroney, Fiona Campbell, Jane Hamilton
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