Question: Refer to Concept Box 17.1. A revised market study indicates the following: pricing for standard interior lots will probably be $103,000 each, premium interior lots

Refer to Concept Box 17.1. A revised market study indicates the following: pricing for standard interior lots will probably be $103,000 each, premium interior lots $118,000, and corner lots $125,000; the average development cost per lot has been revised up to $71,000; administrative costs, etc., remain at 12.5 percent of gross revenue.

a. Can the same 18 percent return on total cost continue to be maintained?

b. Suppose the developer wants a 21 percent return on cost. How much can be paid for the land?

Step by Step Solution

★★★★★

3.42 Rating (152 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

Part A Revised revenues Required land cost to achieve ROC 32 103000 3296000 32 118000 3... 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 Real Estate Principles Questions!

Euclid Fashions, Inc., is introducing a sports jacket. A standard cost card has been prepared for the new jacket, as shown below: The following additional information relating to the new jacket is...

Refer to the Grippers cash collections from customers budget that you prepared in Short Exercise S22- 17. Now assume that Grippers sales are collected as follows: 60% in the month of the sale 30% in...

Refer to the Sparrow Sporting Goods Company data in Short Exercise 3-17. At March 31, 2012, Sparrow Sporting Goods Companys current ratio was 1.61 and their debt ratio was 0.53. Compute Sparrows (a)...

Refer to the data for Janus Products, Inc., in Problem 817. The companys president is interested in knowing how reducing inventory levels and collecting accounts receivable sooner will impact the...

Problem 1 7 - 1 Refer to Concept Box 1 7 . 1 . A revised market study indicates the following: pricing for standard interior lots will probably be \ ( \ $ 1 0 8 , 0 0 0 \ ) each, premium interior...

please assist Refer to-Concept Box 171 A revised market study indicates the following: pricing for standard interior lots will probably be $109,500 each, premium interior lots $124,500, and comer...

Goal: To provide a preliminary development plan and financial analysis to determine whether a large-scale residential lot development can be built in accordance with regulatory requirements and sold...

a revised market study indicates the following: pricing for standard interior lots will probably be $103,000 each, premium interior lots will be $118,000, and corner lots will be $125,000; the...

Preliminary Feasibility Study Land Development Concept Box 1 7 . 1 I. Physical Characteristics Goal: To provide a preliminary development plan and financial analysis to determine whether a large -...

This is concept box 1 7 . 1 : I. Physical Characteristics Goal: To provide a preliminary development plan and financial analysis to determine whether a large - scale residential lot development can...

A refrigerator has a coefficient of performance of 2.10. In each cycle it absorbs 3.40 X 104 J of heat from the cold reservoir. (a) How much mechanical energy is required each cycle to operate the...

Assume that all potential ethical threats have been mitigated and your firm has accepted Magic Natural Ltd as an audit client. Consequently, Richard Craig has asked you to plan for the audit of MN...

ccording to the U . S . Small Business Administration, small businesses generate _ _ _ _ _ _ _ _ _ _ blank times the number of patents per employee than do big businesses. Multiple Choice 1 6 2 3 5 5...

Give the first step of the reaction between the following pentapeptide and the reagent Use curly arrows to show how the bond between the reagent and the relevant amino acid residue is formed; there...

The Miracle Company had 20,000 units in process on December 31, 2020 which was 80% complete as to materials but only 40% complete as to conversion costs. The company's records show 40,000 units were...

why is wage setting curve upward sloping? if there is a disutility of working why are workers unhappy when they are unemployed

11. What causes a foreign currency translation reserve to arise?

A fuily amortizing lllongage is made for 580.000 for 25 years. Total monthly pa)mems \;'il1 be S900 p t?r month. What is the interest rale 0 11 the loan'? AppendixLO1

A partiall y amortizing mortgage is made for 560.000 fo r a term of 10 }ears. The ~orrol\-e: anG lender agree that a balance of 520.000 will remain and be repaiJ as a lump sum at th2t !irn\.'. a. If...

An interest only" mortgage is made for $80,000 at 12 percent huerest for 10 years. The leader and borrower agree that monthly payments will be constant and will require no loan amortization...

a. List and discuss two (2) differences between the Know Your Client Form and the Investment Policy Statement. (4 Marks) b. Managers can select stocks either from the sector level or at the...

Please help with this whole probelm. The drop down box gives the choices of expand or abandon. Introduction to real options Consider the following statement about real options: True or False: The...

Suppose you bought a bond with a coupon rate of 7.5 percent one year ago for $898. The bond sells for $928 today. 1) Assuming a $1,000 face value, what was your total dollar return on this investment...