Question
John is interested in purchasing a multi-office building containing five offices. The current owner provides the...
John is interested in purchasing a multi-office building
containing five offices. The current owner provides the following
probability distribution indicating the probability that the given
number of offices will be leased each year.
| Number of Lease Offices | 0 | 1 | 2 | 3 | 4 | 5 |
| Probability | 2/7 | 3/35 | 6/35 | 1/7 | 9/35 | 2/35 |
If each yearly lease is $12,000, how much could John expect to
collect in yearly leases for the whole building in a given year?(in
dollars)
Homework Answers
Answer #1
| Number of lease offices (X) | 0 | 1 | 2 | 3 | 4 | 5 |
| Probability , P(X) | 2/7 | 3/35 | 6/35 | 1/7 | 9/35 | 2/35 |
So, Expected number of lease offices = E(X) = 
X * P(X) = 0 * 2/7 + 1 * 3/35 + 2 * 6/35 + 3 *1/7 + 4 * 9/35 + 5 *
2/35
= 2.17143
each yearly lease is $12,000
So , John could expect to collect in yearly leases for the whole building in a given year = 2.17143 * $12,000
= $ 26057.16 [Ans]
If you find my answer useful please upvote me. Thank you.
Not the answer you're looking for?
Similar Questions
An investor is interested in purchasing an apartment building containing six apartments. The current owner provides...
An investor is interested in purchasing an apartment building
containing six apartments. The current owner provides the following
probability distribution indicating the probability that the given
number of apartments will be rented during a given month.
Number of Rented Apartments
0
1
2
3
4
5
6
Probability
7⁄36
1⁄18
1⁄9
1⁄4
1⁄12
5⁄18
1⁄36
Find the number of apartments the investor could expect to be
rented during a given month. (Hint: Find the expected value.)
a) 2.9667
b) 2.9167...
A suburban office/warehouse building is leased to a single tenant on a modified gross lease. Given...
A suburban office/warehouse building is leased to a
single tenant on a modified gross lease.
Given the following information, what is the value of
the building? The cap rate is 7%.
28,000 SF shell at 38¢ /SF per month
4,000 SF office within shell at 70¢ /SF per month
surcharge
PGI
Vacancy & Credit Loss (5%)
EGI
Operating Expenses (paid by owner)
Taxes $2,400 / year
Insurance $2,000 / year
Reserves 20¢ / SF
Misc. 2% of EGI
NOI (Io)...
Park Place Complex, located in Pleasantville, Jupiter is a 21-floor modern building complex consisting of commercial...
Park Place Complex, located in Pleasantville, Jupiter is a
21-floor modern building complex consisting of commercial offices
and retail establishments. Key building details are presented
below.
Site area – 20 acres with space for 2,500 parking
spots
Basement – 2 levels.
Houses building security operations and mail receipt/sorting
facilities.
Atrium – floors 1 and 2.
These two floors can be used by everyone including visitors. In
addition to housing elevator banks and escalators, the atrium
houses several fancy coffee shops...
The following article does a good job of breaking down the advantages/disadvantages of leasing vs. purchasing...
The following article does a good job of breaking down the
advantages/disadvantages of leasing vs. purchasing vehicles: Title:
Pros and Cons of Leasing vs. Buying a Vehicle Source:
http://www.investopedia.com/articles/pf/05/042105.asp Buying a car
can be overwhelming. In fact, the pleasure of getting a new car can
be quickly clouded during the financing decision-making process and
price negotiations. Besides price haggling, many car shoppers are
plagued with the decision to leaseor buy. Which financing decision
is right and why? This article will...
LeBron Factory Number of Workers Number of Machines Output (chairs produced per hour) Marginal Product of...
LeBron
Factory
Number
of
Workers
Number
of
Machines
Output
(chairs
produced
per hour)
Marginal
Product of
Labor
Cost of
Workers
Cost of
Machines
Total
Cost
?1
?2
?5
?2
?2
?10
?3
?2
?20
?4
?2
?35
?5
?2
?55
?6
?2
?70
?7
?2
?80
Refer to Table above.
First, complete the missing information in the Table
above.
1.Each worker at the
LeBron Chair Factory costs $12 per hour. The cost of each machine
is $20 per day regardless...
Mattel Responds to Ethical Challenges Business Ethics This case was written by Debbie Thorne, John Fraedrich,...
Mattel Responds to Ethical Challenges Business Ethics This case
was written by Debbie Thorne, John Fraedrich, O. C. Ferrell, and
Jennifer Jackson, with the editorial assistance of Jennifer
Sawayda. This case was developed for classroom discussion rather
than to illustrate either effective or ineffective handling of an
administrative, ethical, or legal discussion by management. All
sources used for this case were obtained through publicly available
material. Mattel, Inc. is a world leader in the design,
manufacture, and marketing of family...
Using the model proposed by Lafley and Charan, analyze how Apigee was able to drive innovation....
Using the model proposed by Lafley and Charan, analyze how
Apigee was able to drive innovation.
case:
W17400
APIGEE: PEOPLE MANAGEMENT PRACTICES AND THE CHALLENGE OF
GROWTH
Ranjeet Nambudiri, S. Ramnarayan, and Catherine Xavier wrote
this case solely to provide material for class discussion. The
authors do not intend to illustrate either effective or ineffective
handling of a managerial situation. The authors may have disguised
certain names and other identifying information to protect
confidentiality.
This publication may not be...
Please read the article and answear about questions. Determining the Value of the Business After you...
Please read the article and answear about
questions.
Determining the Value of the Business
After you have completed a thorough and exacting investigation,
you need to analyze all the infor- mation you have gathered. This
is the time to consult with your business, financial, and legal
advis- ers to arrive at an estimate of the value of the business.
Outside advisers are impartial and are more likely to see the bad
things about the business than are you. You should...
Please answer the following Case analysis questions 1-How is New Balance performing compared to its primary...
Please answer the following Case
analysis questions
1-How is New Balance performing compared to its primary rivals?
How will the acquisition of Reebok by Adidas impact the structure
of the athletic shoe industry? Is this likely to be favorable or
unfavorable for New Balance?
2- What issues does New Balance management need to address?
3-What recommendations would you make to New Balance Management?
What does New Balance need to do to continue to be successful?
Should management continue to invest...
What tools could AA leaders have used to increase their awareness of internal and external issues?...
What tools could AA leaders have used to increase their
awareness of internal and external issues?
???ALASKA AIRLINES: NAVIGATING CHANGE
In the autumn of 2007, Alaska Airlines executives adjourned at
the end of a long and stressful day in the
midst of a multi-day strategic planning session. Most headed
outside to relax, unwind and enjoy a bonfire
on the shore of Semiahmoo Spit, outside the meeting venue in
Blaine, a seaport town in northwest
Washington state.
Meanwhile, several members of...
ADVERTISEMENT
Need Online Homework Help?
Get Answers For Free
Most questions answered within 1 hours.
ADVERTISEMENT
Active Questions
asked 12 minutes ago
asked 26 minutes ago
asked 37 minutes ago
asked 46 minutes ago
asked 47 minutes ago
asked 51 minutes ago
asked 58 minutes ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago
asked 1 hour ago