Question

A rental property is for sale for $600,000. The property has a tenant with a 4...

A rental property is for sale for $600,000. The property has a tenant with a 4 year lease that pays the landlord $15,000 per month. The current relevant discount rate for this property is 6%. What is the Net Present Value (NPV) of the investment? Is this a good investment?

Group of answer choices

$23,719; Yes

$120,00; Yes

-$23,719; No

-$548,023; No

Homework Answers

Know the answer?
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Not the answer you're looking for?
Ask your own homework help question
Similar Questions
Landlord and tenant have negotiated monthly rent at 5% of gross sale. The property has an...
Landlord and tenant have negotiated monthly rent at 5% of gross sale. The property has an operating expense ratio of 35%, a stabilized vacancy rate of 10%.What are the gross retail sales if net annual operating income is estimated to be $50,000?
20. Which of the following leases is based on a minimum fixed rental fee plus a...
20. Which of the following leases is based on a minimum fixed rental fee plus a percentage of the gross income. A. Percentage net lease B. Option lease C. Gross lease D. Net Net Net lease 21. Larry and Dale were roommates. Dale pays Larry for the rent and Larry pays the landlord. Dale’s position would be: A. Assignor B. Sublessee C. Assignee D. Sublessor 22. Which of the following leases would be known as a sandwich lease: A. Gross...
A retail tenant signs a variable scale percentage lease that sets the monthly rental rate at...
A retail tenant signs a variable scale percentage lease that sets the monthly rental rate at 5% of gross sales up to $20,000 per month and 2% of gross sales from 20,000 to 50,000 per month. All sales above $50,000 per month have no allotment towards rent. How much does the tenant pay for the first quarter rent if January sales were $28,000, February sales were $15,000 and March sales were $65,000? A) 2,910.00 B) 3,510.00 C) 2,760.00 D) 3,810.00
An investor has invested $600,000 in a new rental property. Her estimated annual costs are $16,000...
An investor has invested $600,000 in a new rental property. Her estimated annual costs are $16,000 and annual revenues are $48,000. What rate of return per year will investors make over a 30 year-period if the property can be sold for $500,000 at the end of the 30-year period? (Can you solve without excel. please and thank you)
Jenny bought a rental property for $1,000,000 and leased it for 24 months. Rents will be...
Jenny bought a rental property for $1,000,000 and leased it for 24 months. Rents will be collected at the beginning of each month and the residual value after 24 months will be $800,000. To earn 24% rate of return per year on this lease, how much rent/month should be charged?
Jenny bought a rental property for $1,000,000 and leased it for 24 months. Rents will be...
Jenny bought a rental property for $1,000,000 and leased it for 24 months. Rents will be collected at the beginning of each month and the residual value after 24 months will be $800,000. To earn 24% rate of return per year on this lease, how much rent/month should be charged? Please show your work.
Your friend has a rental property that nets $750 a month in income. He wants to...
Your friend has a rental property that nets $750 a month in income. He wants to sell you a 20 year equity share of the property that will pay $200 a month. If your discount rate is 4.5%, how much are you willing to pay for the share of the property?
A commercial rental property is offered for sale and consists of a two-storey building in the...
A commercial rental property is offered for sale and consists of a two-storey building in the business district of a small city. The building contains two stores on the first floor and a number of offices on the 2nd floor. A prospective purchaser estimated that if he buys this property, he will hold it for about 10 years. He estimates that the average annual receipts from rentals during this period to be ₱70,000 and the average annual expenses for all...
1.A triple net lease shifts more cost uncertainty to a tenant than a gross lease. True...
1.A triple net lease shifts more cost uncertainty to a tenant than a gross lease. True False 2.Commercial properties with stable tenants should have lower cap rates than if these same buildings had very risk tenants. A risky tenant is one who is likely to default on lease payments. True False 3. In gross lease the tenant does not have to even think about electricity consumption, property insurance, taxes, or janitorial services. All of these are covered without limits in...
Q11-4: Last Group has a rental cost of €25,000 per month with a four-year lease term....
Q11-4: Last Group has a rental cost of €25,000 per month with a four-year lease term. Casual staff are employed on a weekly basis to carry out telephone sales. The cost of casual staff is €12,000 per month and telephone call costs are €5,000 per month. An offshore call central point has offered to carry out the telephone sales activity from its own premises and using its own staff and telephone services for a fixed payment of €15,000 per month....
ADVERTISEMENT
Need Online Homework Help?

Get Answers For Free
Most questions answered within 1 hours.

Ask a Question
ADVERTISEMENT