Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sale, at what d...
Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sale, at what dispostion cap rate will it make the most money?
Homework Answers
5% is the correct answer
Lower the interest rate, higher the value of asset. Hence, in order to make the most money, the disposition cap has to be lower than the yield on cost and lower the better.
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Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sale, at what d...
QUESTION 13 Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sa...
QUESTION 13 Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sale, at what dispostion cap rate will it make the most money? OOOO
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Question 1 (1 point) Quick Sale Real Estate Company is planning to invest in a new...
Question 1 (1 point) Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000 $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project? (Round to the nearest percent.)
Assume that the price of real estate is determined by P=PV(all cash flows generated by the...
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7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investment? (10 points) The tax rate for gains What is the annual real You have a new job as an engineer and would like to buy a condominium in 4 years. real estate listings for the city where you live and condos similar...
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QUESTION 13 Assume a real estate company pursues a develop-to-sell strategy. Its yield on cost is 7%. At the time of sale, at what dispostion cap rate will it make the most money? OOOO
Question 1 (1 point) Quick Sale Real Estate Company is planning to invest in a new development. The cost of the project will be $23 million and is expected to generate cash flows of $14,000,000 $11,750,000, and $6,350,000 over the next three years. The company's cost of capital is 20 percent. What is the internal rate of return on this project? (Round to the nearest percent.)
7. An investor buys some land for $40,000 and sells it 12 years later for $115,000. at the time of sale was 26%. Inflation during this time was 4% per year. growth rate of return for this investment? (10 points) The tax rate for gains What is the annual real You have a new job as an engineer and would like to buy a condominium in 4 years. real estate listings for the city where you live and condos similar...
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