Himani Bansal_119717239_BAN120 Case Analysis

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A builder has located a piece of property that she would like to buy and eventually build on. The land is currently zoned for four homes per acre, but she is planning to request new zoning. What she builds depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities: Cost of land: $3 million. Probability of rezoning: 0.40. If the land is rezoned, there will be additional costs for new roads, lighting, and so on, of $1 million. If the land is rezoned, the contractor must decide whether to build a shopping center or 1,400 apartments that the tentative plan shows would be possible. If she builds a shopping center, there is a 50 percent chance that she can sell the shopping center to a large department store chain for $5 million over her construction cost, which excludes the land; and there is a 50 percent chance that she can sell it to an…

A builder has located a piece of property that she would like to buy and eventually build on. The land is currently zoned for four homes per acre, but she is planning to request new zoning. What she builds depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities: Cost of land: $3 million. Probability of rezoning: 0.40. If the land is rezoned, there will be additional costs for new roads, lighting, and so on, of $1 million. If the land is rezoned, the contractor must decide whether to build a shopping center or 1,400 apartments that the tentative plan shows would be possible. If she builds a shopping center, there is a 50 percent chance that she can sell the shopping center to a large department store chain for $5 million over her construction cost, which excludes the land; and there is a 50 percent chance that she can sell it to an…

A builder has located a piece of property that she would like to buy and eventually build on. The land is currently zoned for four homes per acre, but she is planning to request new zoning. What she builds depends on approval of zoning requests and your analysis of this problem to advise her. With her input and your help, the decision process has been reduced to the following costs, alternatives, and probabilities: Cost of land: $3 million. Probability of rezoning: 0.40. If the land is rezoned, there will be additional costs for new roads, lighting, and so on, of $1 million.     If the land is rezoned, the contractor must decide whether to build a shopping center or 1,400 apartments that the tentative plan shows would be possible. If she builds a shopping center, there is a 50 percent chance that she can sell the shopping center to a large department store chain for $5 million over her construction cost, which excludes the land; and there is a 50 percent chance that she can sell it to…

The property of the former administrative centre of Tyre Ltd (Tyre) is owned by the company. Tyre had decided in the year that the property was surplus to requirements and demolished the building on 10 June 2020. After demolition, the company will have to carry out remedial environmental work, which is a legal requirement resulting from the demolition. It was intended that the land would be sold after the remedial work had been carried out. However, land prices are currently increasing in value and, therefore, the company has decided that it will not sell the land immediately.   Tyre uses the cost model' in IAS16 Property, plant and equipment' and has owned the property for many years. Required:   Advise the directors how to treat the above in the financial statements for the year ended 31 May 2020.

Current Attempt in Progress Your answer is partially correct. Vaughn Inc. owns and operates a number of hardware stores in the New England region. Recently, the company has decided to locate another store in a rapidly growing area of Maryland. The company is trying to decide whether to purchase or lease the building and related facilities. Purchase: The company can purchase the site, construct the building, and purchase all store fixtures. The cost would be $1,865,700. An immediate down payment of $415,500 is required, and the remaining $1,450,200 would be paid off over 5 years at $369,000 per year (including interest payments made at end of year). The property is expected to have a useful life of 12 years, and then it will be sold for $508,900. As the owner of the property, the company will have the following out-of-pocket expenses each period. Property taxes (to be paid at the end of each year) Insurance (to be paid at the beginning of each year) Other (primarily maintenance which…

A real estate investor has the opportunity to purchase land currently zoned as residential. If the county board approves a request to rezone the property as commercial within the next year, the investor will be able to lease the land to a large discount firm that wants to open a new store on the property. However, if the zoning change is not approved, the investor will have to sell the property at a loss. Profits (in thousands of dollars) are shown in the following payoff table:     State of Nature   Rezoning Approved Rezoning Not Approved Decision Alternative s1 s2 Purchase, d1 600 -200 Do not purchase, d2 0 0     (a) If the probability that the rezoning will be approved is 0.5, what decision is recommended?   Recommended Decision:        What is the expected profit? Enter your answer in dollars. For example, an answer of $200 thousands should be entered as 200,000.   $

AG also owns a building which it bought in 2010 at a cost of $1.3 million. The current market price of the building is $3.0 million. AG management argues that we should not charge depreciation on the building because the asset has appreciated in value, not depreciated.  What is your advice to AG? Justify your answer.

Sub-Prime Loan Company is thinking of opening a new office, and the key data are shown below. The company owns the building that would be used, and it could sell it for $100,000 after taxes if it decides not to open the new office. The equipment for the project would be depreciated by the straight-line method over the project's 3-year life, after which it would be worth nothing and thus it would have a zero salvage value. No change in net operating working capital would be required, and revenues and other operating costs would be constant over the project's 3-year life. What is the project's NPV? (Hint: Cash flows are constant in Years 1-3.) Do not round the intermediate calculations and round the final answer to the nearest whole number. WACC    10.0% Opportunity cost    $100,000 Net equipment cost (depreciable basis)    $65,000 Straight-line depr. rate for equipment    33.333% Annual sales revenues    $128,000 Annual operating costs (excl. depr.)    $25,000 Tax rate    35%

Rowell Company spent $3 million two years ago to build a plant for a new project. It then decided not to go forward with the project, so the building is available for sale or for other new projects. Rowell owns the building free and clear--there is no mortgage on it. Which of the following statements is CORRECT? a. If there is a mortgage loan on the building, then the interest on that loan would have to be charged to any new project that used the building. b. This is an example of an externality, because the very existence of the building affects the cash flows for any new project that Rowell might consider. c. Since the building was built in the past, its cost is a sunk cost and thus need not be considered when new projects are being evaluated, even if it would be used by those new projects. d. If the building could be sold, then the after-tax proceeds that would be generated by any such sale should be charged as an opportunity cost to any new project that would use it.

what is the sale price?

Use the following information to answer questions 1 to 5. A development corporation purchased land that will be the site of a new luxury condominium complex. Management is considering a six month market research study designed to learn more about potential market acceptance of the condominium project. Management anticipates that, if conducted, the market research study will provide one of the following two results. 1. Favorable report (F): A significant number of the individuals contacted express interest in purchasing a condominium. 2. Unfavorable report (U): Very few of the individuals contacted express interest in purchasing a condo- minium. After deciding whether to conduct the market research study, they have the following two decision alternatives. d1 = a small complex with 30 condominiumsd2 = a medium complex with 60 condominiumsFollowing this, a chance event concerning the demand for the condominiums has two states of nature. s1 = strong demand for the condominiumss2 = weak…

Use the following information to answer questions 1 to 5. A development corporation purchased land that will be the site of a new luxury condominium complex. Management is considering a six month market research study designed to learn more about potential market acceptance of the condominium project. Management anticipates that, if conducted, the market research study will provide one of the following two results. 1. Favorable report (F): A significant number of the individuals contacted express interest in purchasing a condominium. 2. Unfavorable report (U): Very few of the individuals contacted express interest in purchasing a condo- minium. After deciding whether to conduct the market research study, they have the following two decision alternatives. d1 = a small complex with 30 condominiumsd2 = a medium complex with 60 condominiumsFollowing this, a chance event concerning the demand for the condominiums has two states of nature. s1 = strong demand for the condominiumss2 = weak…

can you help me to solve this question  ??

3

(Multiple Choice Question) Vanessa recently paid $200,000 cash to purchase both a building and equipment. The fair market value of the building is $180,000, and the fair market value of the equipment is $40,000. When recording this purchase, Vanessa should   1. None of the answers are correct   2. Credit Cash for $200,000 and Credit Mortgage Payable for $20,000   3. Debit Building for $198,000 and Equipment for $44,000   4. Debit Building for $180,000 and Equipment for $40,000   5. Debit Building for $163,636.36 and Equipment for $36,363.64

Your client, Felix Hammond, the Chairman of a small local company, recently bought a motor van for GH₵15,000 on 1st January, 2016. The expected useful life of the motor van is three (3) years and at the end of the useful life it could be sold for GH₵3,500. He has asked you to clarify some points concerning depreciation. He later disposed of the motor van on 1st February, 2018 for GH₵6,300.Required:(a) Explain the aim of charging depreciation in the financial statements.7(b) Explain two methods of depreciation and a reason behind a choice.(c) Calculate the rate of depreciation using the reducing balance method.(d) Calculate the value of depreciation to be charged for 31st December, 2017.(d) Calculate the gains on the disposal of the motor van on 1st February, 2018.

Solve this please