1) Under the cost approach to market value, an investor should
not pay more for a...
1) Under the cost approach to market value, an investor should
not pay more for a property than it would cost to rebuild it at
today's prices. (T/F)
2) Easy money can choke off the demand for real estate.
(T/F)
3) Gold and precious metals and collectibles such as stamps,
coins and cars are considered intangible investments. (T/F)
4)The direct capitalization approach to real estate valuation
considers the value of a property to be
a. the property's area in square...
(Financial statement analysis) The annual
sales for Salco, Inc. were $4.58 million last year.
Current assets...
(Financial statement analysis) The annual
sales for Salco, Inc. were $4.58 million last year.
Current assets
$505,000
Liabilities
$1,009000
Net fixed assets
1,513,000
Owners' equity
$1,009,000
Total Assets
$2,018,000
Total
$2,018,000
Salco's income statement for the year was as
follows
Sales
$4,580,000
Less: Cost of goods sold
(3,507,000)
Gross profit
$1,073,000
Less: Operating expenses
(492,000)
Net operating income
$581,000
Less: Interest expense
(109,000)
Earnings before taxes
$472,000
Less: Taxes (35%)
(165,200)
Net income
$306,800
B) Salco plans to renovate...
1. One advantage of Adjustable Rate Mortgages (ARM) is that
a. lenders face lower levels of...
1. One advantage of Adjustable Rate Mortgages (ARM) is that
a. lenders face lower levels of interest rate risk than a fixed
rate mortgage.
b. the outstanding loan balance can be adjusted regularly.
c. the default risk of borrowers is lower than under a fixed
rate mortgage.
d. All of the above.
2. Gilbert takes out a 23-year adjustable rate mortgage loan for
$6,000,000 with monthly payments. The first two years of the loan
have a “teaser” rate of 2%,...
Problem 1: CEO of Roile Manufacturing has asked for a variety of
information about the operations...
Problem 1: CEO of Roile Manufacturing has asked for a variety of
information about the operations of the firm from last year. The
CEO is given the following information, but with some data missing:
Total sales revenue ? Number of units produced and sold 500,000
units Selling price ? Operating income $225,000 Total investment in
assets $2,500,000 Variable cost per unit $2.50 Fixed costs for the
year $3,250,000 Required Find (a) total sales revenue, (b)
selling price, (c) rate...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages,...
The Alexander Company reported the following income statement
for 2016:
Sales $15,000,000
Less: Operating expenses
Wages, salaries, benefits $6,000,000
Raw materials 3,000,000
Depreciation 1,500,000
General, selling, and administrative expenses 1,500,000
Total operating expenses 12,000,000
Earnings before interest and taxes (EBIT) $3,000,000
Less: Interest expense 750,000
Earnings before taxes $2,250,000
Less: Income taxes 1,000,000
Earnings after taxes $1,250,000
Less: Preferred dividends 250,000
Earnings available to common stockholders $1,000,000
Earnings per share—250,000 shares outstanding $4.00
Assume that all depreciation and 75 percent...
Thornton Corporation operates three investment centers. The
following financial statements apply to the investment center named...
Thornton Corporation operates three investment centers. The
following financial statements apply to the investment center named
Bowman Division.
BOWMAN DIVISION
Income Statement
For the Year Ended December 31, Year 2
Sales revenue
$
106,880
Cost of goods sold
59,875
Gross margin
47,005
Operating expenses
Selling expenses
(2,720
)
Depreciation expense
(4,055
)
Operating income
40,230
Nonoperating item
Loss on sale of land
(4,200
)
Net income
$
36,030
BOWMAN DIVISION
Balance Sheet
As of December 31, Year 2
Assets
Cash...
Rundle Corporation operates three investment centers. The
following financial statements apply to the investment center named...
Rundle Corporation operates three investment centers. The
following financial statements apply to the investment center named
Bowman Division:
BOWMAN DIVISION
Income Statement
For the Year Ended December 31, 2018
Sales revenue
$
107,380
Cost of goods sold
59,375
Gross margin
48,005
Operating expenses
Selling expenses
(2,670
)
Depreciation expense
(4,175
)
Operating income
41,160
Nonoperating item
Loss of sale of land
(3,500
)
Net income
$
37,660
BOWMAN DIVISION
Balance Sheet
As of December 31, 2018
Assets
Cash
$
12,602...