Question
In: Finance
Consider the following pro forma for the next 4questionsPotential Gross Income 100,000 sq. ft...
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Consider the following pro forma for the next 4 questions |
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Potential Gross Income 100,000 sq. ft for the coming year |
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average rent $15.00 per ft. |
$ 1,500,000 |
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Less Vacancy Allowance (average 8%) |
$ (120,000) |
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Effective Gross Income |
$ 1,380,000 |
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Cleaning expenses (5% of net rev) |
$ (69,000) |
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Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft. |
$ (80,000) |
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Management & Maintenance (11% of revenue) |
$ (151,800) |
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Reserve for Replacement (savings for major repairs) |
$ (50,000) |
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Property Taxes ($0.10 per $100 of R.C.) |
$ (4,000) |
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$ (354,800) |
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Estimated Net Operating Income |
$ 1,025,200 |
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The purchase price today is 9,500,000, what is the cap rate? |
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Solutions
Expert Solution
Cap Rate = Estimated Operating Income / Purchase Price today
Cap Rate = 1025200 / 9500000
Cap Rate = 10.79%
jeff jeffy answered 1 year agoRelated Solutions
Consider the following pro forma for the next 4 questions Potential Gross Income 100,000 sq. ft...
Consider the following pro forma for the next 4
questions
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.
$ 1,500,000
Less Vacancy Allowance (average 8%)
$ (120,000)
Effective Gross Income
$ 1,380,000
Cleaning expenses (5% of net rev)
$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.
$ (80,000)
Management & Maintenance (11% of revenue)
$ (151,800)
Reserve for Replacement (savings for major repairs)
$ (50,000)
Property Taxes ($0.10...
Consider the following pro forma for the next 4 questions Potential Gross Income 100,000 sq. ft...
Consider the following pro forma for the next 4
questions
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.
$ 1,500,000
Less Vacancy Allowance (average 8%)
$ (120,000)
Effective Gross Income
$ 1,380,000
Cleaning expenses (5% of net rev)
$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.
$ (80,000)
Management & Maintenance (11% of revenue)
$ (151,800)
Reserve for Replacement (savings for major repairs)
$ (50,000)
Property Taxes ($0.10...
Consider the following pro forma for the next 4 questions Potential Gross Income 100,000 sq. ft...
Consider the following pro forma for the next 4
questions
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.
$ 1,500,000
Less Vacancy Allowance (average 8%)
$ (120,000)
Effective Gross Income
$ 1,380,000
Cleaning expenses (5% of net rev)
$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.
$ (80,000)
Management & Maintenance (11% of revenue)
$ (151,800)
Reserve for Replacement (savings for major repairs)
$ (50,000)
Property Taxes ($0.10...
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $ ...
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.
$ 1,500,000
Less Vacancy Allowance (average 8%)
$ (120,000)
Effective Gross Income
$ 1,380,000
Cleaning expenses (5% of net rev)
$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.
$ (80,000)
Management & Maintenance (11% of revenue)
$ (151,800)
Reserve for Replacement (savings for major repairs)
$ (50,000)
Property Taxes ($0.10 per $100 of R.C.)
$
(4,000)
$ (354,800)
Estimated Net...
Potential Gross Income 100,000 sq. ft for the coming year average rent $15.00 per ft. $ ...
Potential Gross Income 100,000 sq. ft for the coming year
average rent $15.00 per ft.
$ 1,500,000
Less Vacancy Allowance (average 8%)
$ (120,000)
Effective Gross Income
$ 1,380,000
Cleaning expenses (5% of net rev)
$ (69,000)
Insurance ($ 0.02 per dollar replacement, R.C. = $40 per ft.
$ (80,000)
Management & Maintenance (11% of revenue)
$ (151,800)
Reserve for Replacement (savings for major repairs)
$ (50,000)
Property Taxes ($0.10 per $100 of R.C.)
$
(4,000)
$ (354,800)
Estimated Net...
Consider a 100,000 sq. ft. building that will be acquired (at price $0) and demolished by...
Consider a 100,000 sq. ft. building that will be acquired (at
price $0) and demolished by local government at the end of 15
years. Assume the building is fully leased building
under an absolute net lease structure (all expenses paid by
tenant); Consider 2 leases:
15 year lease at
$15/ft./yr.
5 year lease at
$15/ft./yr.
Suppose that $15 is the market rate and that the forecasted rent
growth rate is 0% . Also suppose that the discount rate for
contractual lease...
• Describe pro forma income and the importance of pro forma income in the evaluation of...
• Describe pro forma income and the importance of pro forma
income in the evaluation of the income statement. Choose at least
two items that are excluded from pro forma income. Suggest to
management why including the items would be misleading to investors
and creditors.
Consider you have prepared Pro-forma income statements of a new venture that show a net income...
Consider you have prepared Pro-forma income statements of a new
venture that show a net income of PKR 50,000, PKR 100,000, and PKR
150,000 for the first three years of starting the business. You are
excited to see a positive cash inflow of PKR 300,000 for the first
three years. However, your classmate with business majors in
finance has highlighted that you may not have PKR 300,000 in cash,
although your Pro-forma income statements show that you will earn
that...
Which of the following budgeted pro forma financial statements is prepared first? A. Pro forma statement...
Which of the following budgeted pro forma financial statements
is prepared first?
A. Pro forma statement of cash flows
B. Pro forma income statement
C .Pro forma balance sheet
D. May be prepared in any order
explain why please
Prepare the following Pro Forma Financial Statements for the proposed new location (pro forma statements in...
Prepare the
following Pro Forma Financial Statements for the proposed new
location (pro forma statements in this case are budgeted statements
for 2018 based on the new location scenario at the bottom of the
page)
Pro Forma Income Statement
Pro Forma Balance Sheet
PEYTON APPROVED PRO FORMA
INFORMATION
The company is planning to
open another location in 2018 . Prepare pro forma financials for
2018 for the new location using the following information:
1. Cost of leasing commercial
space: $1,500...
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