Assume that you were given an opportunity to purchase a real estate project using an equity participation loan. The NOI for each year of the holding period are shown below:

2 Annual payments are being used to make the problem easier!

Additional information:

1) Purchase price = $1,900,000

2) Estimated value of land = $500,000

3) Anticipated mortgage terms:

a) Loan to value ratio = .80 b) Interest rate = 5.25%
c) Years to maturity = 25

d) Points charged = 3

e) Prepayment penalty = 2% of outstanding balance

f) Level payment, fully amortized

g) Fixed interest rate, monthly payments

4) Participation terms:
a) Share of NOI = 15.5% over $130,000 b) Share of Appreciation = 18%

5) Future sales price = $2,350,000

6) Estimated selling expenses as proportion of future sales price = 5%

7) Client's minimum required before-tax rate of return on equity = 12%

Calculate:

The before-tax cash flows and the before-tax equity reversion (you do not need to calculate the after-tax cash flows or reversion).

The before-tax net present value to the investor.

Assume that you were given an opportunity to purchase a real estate project using an equity participation loan. The NOI for each year of the holding period are shown below:

Year 1 Year 2 Year 3 Year 4

NOI 124,787 132,225 139,954 148,468

Additional information:

1) Purchase price = $1,900,000

2) Estimated value of land = $500,000

3) Anticipated mortgage terms:

a) Loan to value ratio = .80

b) Interest rate = 5.25%

c) Years to maturity = 25

d) Points charged = 3

e) Prepayment penalty = 2% of outstanding balance

f) Level payment, fully amortized

g) Fixed interest rate, monthly payments

4) Participation terms:

a) Share of NOI = 15.5% over $130,000

b) Share of Appreciation = 18%

5) Future sales price = $2,350,000

6) Estimated selling expenses as proportion of future sales price = 5%

7) Client's minimum required before-tax rate of return on equity = 12%

Calculate:

a. The before-tax cash flows and the before-tax equity reversion (you do not need to calculate the after-tax cash flows or reversion).

b. The before-tax net present value to the investor.

Please Show your work. Thank you.

6. A Treasury bill that settled January 15, 2020 has face value $1 million and matures April 14, 2020. Its yield on a bank discount basis was 3.00%.

1. Show that the actual number of days elapsed between settlement and maturity is 90 days. [Hint: 2020 is a leap year.]
2. Calculate the bond equivalent yield (actual/365 basis).
3. Calculate the coupon equivalent yield (30/360 basis).
4. Calculate the CD equivalent yield (actual/360 basis).
5. Explain why the bond equivalent yield in part b is 365/360 of the CD equivalent yield in part d.

The following information is related to Tobey Corporation for 2020:
 Net Income: $2,500,000
 Common Stock Activities
1/1/20: 700,000 common shares outstanding
3/1/20: Purchased 60,000 treasury shares
7/1/20: 3-for-1 stock split
11/1/20: 120,000 new shares issued for cash
 8% Cumulative Preferred Stock
10,000 shares at $100 par
Required
a. Compute weighted average common shares outstanding (WACSO) for 2020.
b. Compute basic earnings per share for 2020. (Round to no fewer than four decimal places.)

Bone Thugs-n-Harmony incurs the expenditures listed below for constructing its corporate headquarters. They took out a $250,000 loan at 8% for the construction. They also have 2 additional loans: 500,000 at 10%, 200,000 at 6%. All loans were outstanding as of 1/1/2019 and were still outstanding when construction was completed on 4/30/2020.

How much interest does Bone Thugs-n-Harmony capitalize in 2019?

Question 6: The following company provides a single product and have provided their summary forecast data shown below relating to its product for 2020.    

a. Calculate the contribution margin per unit.                         

b. Calculate the contribution margin ratio.

c. Calculate the break-even in units and sales dollars for 2020.

d.Calculate the profit earned in 2020.

Carla Vista Company, which uses the retail LIFO method to determine inventory cost, has provided the following information for 2020:

Assuming stable prices (no change in the price index during 2020), what is the cost of Carla Vista's inventory at December 31, 2020? (Hint: Round intermediate calculation to 2 decimal places, e.g. 0.63 and final answer to 0 decimal places.)

On January 2, 2020, Dove, Inc. acquired a 25% interest in the outstanding voting ordinary shares of Cabot Enterprises for a cost of P900,000. This investment provides Dove with the ability to exercise significant influence over Cabot and classified the investment as investment in associates. The acquisition cost of the investment is in excess of the book value by P140,000; the excess is attributable to goodwill which is to be amortized over 20 year. During 2020, Cabot Enterprises reported net income of P312,000 and paid total cash dividends of P220,000. At December 31, 2020, the balance account Investment in Associates in Cabot should have a carrying value of?