You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $ 10.5 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $8.1 million each, while the other five are worth $16.1 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company’s accounting earnings and its economic earnings in each of the following cases:
The company sells all of the properties at their appraised values today.
The company sells none of the properties.
The company sells the properties that have fallen in value and keeps the others.
The company sells the properties that have risen in value and keeps the others.
You manage a real estate investment company. One year ago, the company purchased 10 parcels of...
You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $ 12.0 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $9.8 million each, while the other five are worth $18.0 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company’s accounting earnings and its economic earnings in each of...
You manage a real estate investment company. One year ago, the company purchased 10 parcels of land distributed throughout the community for $ 10.4 million each. A recent appraisal of the properties indicates that five of the parcels are now worth $8.2 million each, while the other five are worth $17.0 million each. Ignoring any income received from the properties and any taxes paid over the year, calculate the investment company's accounting earnings and its economic earnings in each of...
1. Lancaster Real Estate Company was founded 25 years ago by the current CEO, Robert Lancaster. The company purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit every year for the past 18 years, and the shareholders are satisfied with the company's management. Prior to founding Lancaster Real Estate, Robert was the founder and CEO of a failed alpaca farming operation. The resulting bankruptcy made him extremely averse to debt...
One year ago, your company purchased a machine used in manufacturing for $110,000. You have learned that a new machine is available that offers many advantages, you can purchase it for $150,000 today. It will be depreciated on a straight line basis over ten years, after which it has no salvage value. You expect that the new machine will contribute EBITDA (earnings before interest, taxes depreciation, and amortization) of $40,000 per year for the next ten years. The current machine...
CASE 1-5 Financial Statement Ratio Computation Refer to Campbell Soup Company's financial Campbell Soup statements in Appendix A. Required: Compute the following ratios for Year 11. Liquidity ratios: Asset utilization ratios:* a. Current ratio n. Cash turnover b. Acid-test ratio 0. Accounts receivable turnover c. Days to sell inventory p. Inventory turnover d. Collection period 4. Working capital turnover Capital structure and solvency ratios: 1. Fixed assets turnover e. Total debt to total equity s. Total assets turnover f. Long-term...
How does this article relate to the factors of productions in economics? From Music to Maps, How Apple’s iPhone Changed Business Ten years ago, hailing a cab meant waiving one's arm at passing traffic, consumers routinely purchased cameras, and a phone was something people made calls on. The iPhone, released a decade ago this month, changed all of that and more, sparking a business transformation as sweeping as the one triggered by the personal computer in the 1980s. Apple Inc.'s...
Read about Cokes strategy in Africa in the article below and discuss the ethics of selling soft drinks to very poor people. Is this an issue that a company like Coke should consider? Africa: Coke's Last Frontier Sales are flat in developed countries. For Coke to keep growing, Africa is it By Duane Stanford Piles of trash are burning outside the Mamakamau Shop in Uthiru, a suburb of Nairobi, Kenya. Sewage trickles by in an open trench. Across the street,...