TUI UNIVERSITY
Module 2 Case Assignment
FIN301 - Principles of Finance
Dr. Alan Harper
March 5, 2011
Part I:
A. Suppose your bank account will be worth $15,000.00 in one year. The interest rate (discount rate) that the bank pays is 7%. What is the present value of your bank account today? What would the present value of the account be if the discount rate is only 4%?
Present Value at 7%
$15,000/1.07=$14,018.69
Present Value at 4%
$15,000/1.07=$14,423.08
B. Suppose you have two bank accounts, one called Account A and another Account B. Account A will be worth $6,500.00 in one year. Account B will be worth $12,600.00 in two years. Both accounts earn 6% interest. What is the present value of each of these accounts?
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However, with only one employee expected to be hired, all profits goes to the owner. At $500, promotional considerations will be low, and with a plan to be community centered and community friendly, they are likely to have repeat customers.
RJ Wagner and Assoc. Realty Real Estate Brokerage Business The business is purely at the mercy of the economy. The housing market has not only been suffering in new home sales, but established home sales as well. Foreclosures are rampant, and with high unemployment, people don't seek home sales. In the Marketing Plan, an $81,000 a year salary for each agent is extremely optimistic, vice the median annual wages, including commissions, of salaried real estate sales agents were $40,150 in May 2008. The middle 50 percent of real estate agents earned between $27,390 and $64,820 a year. The lowest 10 percent earned less than $21,120, and the highest 10 percent earned more than $101,860 (Occupational Outlook Handbook, 2010-11 Edition: Real Estate Brokers and Sales Agents, 2011). How many home sales will really occur in a month and how many would use this particular Real Estate Agency? A strength to this business is the funded start up costs requiring less borrowing. Another strength is the knowledge of the owner (wrote and published a real estate book) and the potential to pay top commissions and training to the hired agents. This plan is high risk since depending on the market, the
The most formidable aspect in real estate has to be maintaining one’s career. Although there are many agents in this career field, the competitive environment portrayed daily makes this career one that may prove to be unsuitable for the meek. Negotiations, persuasion, debate and often a frequent contest for supremacy in the agency are recurring tasks when trying to sell property to clients. One could think of this as similar to the board game “Monopoly”, in reverse. Rather than trying to own all the property around, these “players” attempt to sell as much land as they possibly can. Those who fail to recruit an adequate amount of clients find it hard making it “past go” and often fail in the agency or, much worse, lose their jobs.
Poor Dog, Inc. borrowed $135,000 from the bank today. They must repay this money over the next six years by making monthly payments of $2,215.10. What is the interest rate on the loan? Express your answer with annual compounding.
According to Apgar (2009), “business real estate is not merely an operating necessity; it is a strategic resource.” For most organizations and prospective consumers, the practice is reactive. A sudden increase in housing demand where the supply is low pushes firms to raise asset prices. Meanwhile, buyers rely on the available market information to make purchase decisions (Guntermann & Norbin, 1991). Although maximizing profitability should be a goal for every business, a real estate company that understands and
a. What is the CD’s value at maturity (future value) if it pays 10 percent annual interest?
8. What is the net present value of the following cash flows discounted at 12%?
12. Today, you deposit $10,750 in a bank account that pays 3 percent simple interest. How much interest will you earn over the next 7 years?
A person deposited $500 in a savings account that pays 5% annual interest that is compounded yearly. At the end of 10 years, how much money will be in the savings account? (Bluman, A. G. 2005, page 230).
The website includes information about the current market and trends along with neighborhood guides.An outline is also included in this section which further reinforces what the mission statement says regarding leading the real estate market. This outline breaks down the companies ranking in New York City as #1 firm, Long Island’s #1 firm, the 4th largest real estate firm in the United States, the number of office of 81, 6,000 agents, number of sales and rental transaction of 37,800, dollar volume per year of $22+ billion and concluding with the property management having 55,000+ apartments under management.The mission statement does seem a bit short and to the point for the size of the company.However, it is very clear about being a leader in the business and exceeding customers’ expectations. I believe it does need some revising due to the company having expanded to the South Florida market in the past 5-6 years. South Florida sales volume being very impression of close to a $1 billion in sale per year. The part “From Manhattan to Montauk” should include South Florida since they do have a significant presents in the Miami area market. The website does state office in California, Connecticut, Colorado and New Jersey. The areas should also be added to
Debbie wants to have $38,855 in her bank account 5 years from now. The account will pay 0.7% interest per month. How much money does she need to put in her bank account at the end of each month to achieve this goal?
Buying or selling a house or an apartment is one of the biggest decisions of a person’s life. And when selling or establishing a price for real estate, people seek out real estate agents to do the dirty work. A real estate agent has to convince a prospective homeowner that he or she is trustworthy and knowledgeable. In many ways, the agent acts as a counselor to individuals and families about to embark on a huge commitment. Real estate agents have a thorough knowledge or real estate market in their community. They
For the following Case Assignment, I will investigate if the finance departments are the best place to train future CEO’s. In addition, I will include a discussion of the pros and cons of hiring a CFO to be CEO. Also, I will provide two actual examples of CFO’s of publicly-traded companies who became CEO’s of publicly-traded companies within the past 5 years. Furthermore, I will research if those individuals have a CPA and/or CFA designations.
a. yes, even if they lose money on the order they may gain a customer
This paper will seek to provide an overview of the real estate process and its affects on the real estate agent. An agent needs to be knowledgable about the steps required to make a sale, and the risks involved when the sale does not go as planned. Real estate sales require much of the agent, including sacrifices in their personal lives and in their financial stability. Agents must be teachable and willing to seek to see others succeed. A successful real estate sale consists of many steps, sacrifices to personal time, and an agent’s ability to work well with others while remaining incredibly flexible.
CBPRO is a leading real estate company in Virginia, an independent franchisor of the Coldwell banker brand since 2001. CBPRO’s business focuses on residential real estate services such as selling, buying, and leasing houses; has 299 agents in 13 offices. The residential real estate industry is influenced by the ups and downs of the economy. In good times it fuels consumers confidence and spending, and in bad times consumers are cautious and not willing to invest in a house etc. CBPRO had a breaking sale of 2,848 percent in the first three years of services and during the plummet in the economy, sales flattened down to 2.5 percent, as was the case with the industry in general. (Coldwell Banker – Virginia Beach, Page 279). Due to high competition in the residential real estate industry (especially locally), coupled with fluctuating national economic conditions, and narrowly defined target customers, CBPRO faced several distinctive challenges; residential and clients lists were important to CBPRO business and to its competitors, especially the local competitors.
The overall business model has the potential for great success, barring a catastrophic crash in the real estate industry. I believe there are competent people at the helm of this ship who have the expertise to predict changes in the market and make necessary adjustments. There are,