Logo
Home Study Material Contact Search
AI Chat FREE
  1. business
  2. finance
  3. questions 31-40 are four (4) points each. your emp

Questions 31-40 are four (4) points each. Your employer, Kent, LLC, is considering an investment...

50.1K

Verified Solution

Question

Finance

Questions 31-40 are four (4) points each. Your employer, Kent, LLC, is considering an investment in an office building that has the following cash flows:

Purchase in Year 0 $ -2,750,000

Year 1. 180,000

Year 2.. 276,000

Year 3.. 220,000

Year 4 239,000

Year 5 250,000, and a sale @ $3,190,000 takes place EOY 5

The companys weighted average cost of capital that they use as their discount rate for such calculations is 7%

In the Kent, LLC example above, assume that the company bought the office building using 70% mortgage debt at an interest rate of 4.00% over 240 months.

37. What would be the balance of the loan at the end of Year 5 ?

a. $1,240,000.

b. $1,376,320.

c. $1,290,300

d. $1,577,033

38. What would be the total cash flows in Year 5, taking into consideration the cash flows, annual debt service, sale price and the balance on the loan at the EOY 5?

a. $1,662,985

b. $1,937,607

c. $1,722,986.

d. $1,915,172

Answer & Explanation Solved by verified expert
Get Answers to Unlimited Questions

Join us to gain access to millions of questions and expert answers. Enjoy exclusive benefits tailored just for you!

Membership Benefits:
  • Unlimited Question Access with detailed Answers
  • Zin AI - 3 Million Words
  • 10 Dall-E 3 Images
  • 20 Plot Generations
  • Conversation with Dialogue Memory
  • No Ads, Ever!
  • Access to Our Best AI Platform: Flex AI - Your personal assistant for all your inquiries!
Become a Member

Other questions asked by students

Q

Aluminium oxide is a white , crystalline powder . it can be used as an adsorbent...

Chemistry
Q

Topic: Self-Compacting Concrete 1)Submit a preliminary abstract that should consist of more than 150 words 2)Introduction ( this...

Civil Engineering
Q

explain what causes the human brain to forget and how can the ability to forget serve...

Psychology
Q

In a downhill ski race surprisingly little advantage is gained by getting a running start. This...

Physics
Q

The following information is related to Buffalo Company for 2017. Retained earnings balance, January 1, 2017 $997,830 Sales Revenue 26,123,300 Cost...

Accounting
Q

Let S T be sets in a universe U and let x y U a...

Basic Math
Q

Part 3 of 3 Find the open intervals where the function f x 4x 24x...

Calculus
Q

Check my work On January 1, 2021, the Marjlee...

Accounting
Q

El Pueblo de Red Herring emiti $60,000 en rdenes de compra. Suponga que cuando todas...

Accounting
Q

The following are selected ledger accounts of Brock inc, At december 31,2022: Brock's income tax...

Accounting
Q

Total Liabilities + Owners Equity should equal Total Debt True False

Accounting
Q

The following materials standards have been established for a particular product: ...

Accounting