ZuoTi.Pro
Question

Mr. Sam Golff desires to invest a portion of his assets in rental property. He has...

Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties.
    

Palmer Heights
Yearly Aftertax
Cash Inflow
(in thousands)		 Probability
$ 140 0.1
145 0.2
160 0.4
175 0.2
180 0.1

  

Crenshaw Village
Yearly Aftertax
Cash Inflow
(in thousands)		 Probability
$ 145 0.2
150 0.3
160 0.4
170 0.1

a. Find the expected cash flow from each apartment complex. (Enter your answers in thousands (e.g, $10,000 should be enter as "10").)
  

Expected Cash Flow (in thousands)
Palmer Heights $160
Crenshaw Village $155

  
b. What is the coefficient of variation for each apartment complex? (Do not round intermediate calculations. Round your answers to 3 decimal places.)

Coefficient of Variation
Palmer Heights
Crenshaw Village
business   finance   
0 0
Add a comment Improve this question Transcribed image text
Next > < Previous
Sort answers by oldest

Homework Answers

Answer #1

Calculate the expected cash flow and coefficient of variation as follows Palmer Heights Crenshaw village Expected cash Expected 2 Cash flow Probability cash flows Deviations2 Cash flow Probability flows Deviations 2 $20.00 $7.50 $10.00 $22.50 0.10 $14.00 0.20 $29.00 0.40 $64.00 0.20 $35.00 0.10 $18.00 160.00 $40.00$145.00 $45.00 $150.00 140.00 145.00 5 160.00 175.00 180.00 0.20 $29.00 0.30 $45.00 0.40 $64.00 0.10 $17.00 4 $0.00$160.00 $45.00 $170.00 $40.00 8 Expected cash flow 155.00 Standard deviation Coefficient of variation 13.04 0.081 7.75 0.050 10 Formulas Palmer Heights Crenshaw villa Expected АЗВЗ #A5 * B5 Expected 2 Cash flow Probability cash flows 3 140 4 145 5 160 6 175 7 180 8 Expected cash flow SUM(C3:C7 Deviations 2 Cash flow Probability cash flows Deviations2 F3 (E3-SG$8)42 F4 (E4 SG$8)A2 0.1 0.2 0.4 0.2 0.1 0.2 0.3 0.4 0.1 E4 F4 E5 F5 B5 (A5-SCS8)A2 160 B6 (A6-SC$8)A2 170 E6 F6 F6 (E6-SG$8)A2 SUM(G3:G7 SUM(D3:D7) (1/2) Standard deviation Coefficient of variation -SUM(H3:H7)(1/2) H9/G8 10

0 0
Add a comment
Know the answer?
Add Answer to:
Mr. Sam Golff desires to invest a portion of his assets in rental property. He has...
Your Answer:

Post as a guest

Your Name:

What's your source?

Earn Coins

Coins can be redeemed for fabulous gifts.

Log In

Sign Up

Not the answer you're looking for? Ask your own homework help question. Our experts will answer your question WITHIN MINUTES for Free.
Similar Homework Help Questions

  • Mr. Sam Golff desires to invest a portion of his assets in rental property. He has...

    Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties. Palmer Heights Yearly Aftertax Cash Inflow (in thousands) Probability $ 20 0.2 25 0.2 40 0.2 55 0.2 60 0.2 Crenshaw Village Yearly Aftertax Cash Inflow (in thousands) Probability $ 25...

  • Mr. Sam Golff desires to invest a portion of his assets in rental property. He has...

    Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties.      Palmer Heights Yearly Aftertax Cash Inflow (in thousands) Probability $ 30 .2 35 .2 50 .2 65 .2 70 .2    Crenshaw Village Yearly Aftertax Cash Inflow (in thousands) Probability...

  • Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his c...

    Mr. Sam Golff desires to invest a portion of his assets in rental property. He has narrowed his choices down to two apartment complexes, Palmer Heights and Crenshaw Village. After conferring with the present owners, Mr. Golff has developed the following estimates of the cash flows for these properties. Palmer Heights Yearly Aftertax Cash Inflow (in thousands) Probability $ 30 .2 35 .2 50 .2 65 .2 70 .2 Crenshaw Village Yearly Aftertax Cash Inflow (in thousands) Probability $ 35...

  • Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental...

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Windy Acres Hillcrest Apartments   Yearly Aftertax Cash Inflow Probability   Yearly Aftertax Cash Inflow Probability 30,000 0.2 35,000 0.4 35,000 0.2 40,000 0.2 50,000 0.2 50,000 0.1 65,000 0.2 60,000 0.3 70,000 0.2 Mr. Backster is likely to hold the...

  • Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental...

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Windy Acres Hillcrest Apartments   Yearly Aftertax Cash Inflow Probability   Yearly Aftertax Cash Inflow Probability 40,000 0.2 45,000 0.4 45,000 0.2 50,000 0.2 60,000 0.2 60,000 0.1 75,000 0.2 70,000 0.3 80,000 0.2 Mr. Backster is likely to hold the...

  • Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental...

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Windy Acres Yearly Aftertax Cash Inflow 10,000 15,000 30,000 45,000 50,000 Probability 0.1 0.2 0.4 0.2 Hillcrest Apartments Yearly Aftertax Cash Inflow 15,000 20,000 30,000 40,000 Probability 0.2 0.3 1 0.1 0.1 Mr. Backster is likely to hold the...

  • Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental...

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental properly. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows Probability Windy Acres Yearly Aftertax Cash Inflow 20, ENN 25,000 40,000 55.000 60,000 0.2 Hillcrest Apartments Yearly Aftertax Cash Inflow 25,000 30,000 40,000 50,000 Probability 0.2 0.2 e.2 0.2 Mr. Backster is likely to hold the apartment complex of...

  • Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental...

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: Hillcrest Apartments Yearly Aftertax Cash Inflow P 85,000 Probability windy Acres Yearly Aftertax Cash Inflow 80,000 85,000 100,000 115,003 120,000 robability 0.2 0.2 0.2 Mr. Backster is likely to hold the apartment complex of his choice for about 20...

  • The anticipated annual cash inflows

    Mr. John Backster, a retired executive, desires to invest a portion of his assets in rental property. He has narrowed his choices to two apartment complexes, Windy Acres and Hillcrest Apartments. The anticipated annual cash inflows from each are as follows: WindyAcresHillcrestApartments  Yearly AftertaxCash InflowProbability  Yearly AftertaxCash InflowProbability70,0000.275,0000.275,0000.280,0000.390,0000.290,0000.4105,0000.2100,0000.1110,0000.2 Mr. Backster is likely to hold the apartment complex of his choice for about 25 years and will use this period for decision-making purposes. Either apartment can be purchased for $200,000. Mr. Backster uses a risk-adjusted...

  • Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow...

    Kyle's Shoe Stores Inc. is considering opening an additional suburban outlet. An aftertax expected cash flow of $180 per week is anticipated from two stores that are being evaluated. Both stores have positive net present values. 90 Probability 0.2 0.4 0.2 180 Site B Probability Cash Flows 0.1 0.3 0.1 180 0.3 0.2 190 0.2 260 240 a. Compute the coefficient of variation for each site. (Do not round intermediate calculations. Round your answers to 3 decimal places.) Coefficient of...

ADVERTISEMENT
Free Homework Help App
Download From Google Play
Scan Your Homework
to Get Instant Free Answers
Need Online Homework Help?
Ask a Question
Get Answers For Free
Most questions answered within 3 hours.
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT