Please use excel to answer 1. and 2. Consider commercial properties A and B for which the land value relative to the overall value of the property is 80% and 20%, respectively. Each property is currently valued at $10M. 1. If during a particular 5-year period structure prices are expected to increase by 2% annually and land prices are expected to increase by 4% annually, what is the expected value of property A and of property B at the end of this 5-year period? 2. If during a particular 5-year period structure prices are expected to increase by 2% annually and land prices are expected to decrease by 4% annually, what is the expected value of property A and of property B at the end of this 5-year period?

Returns of a Single Asset. Suppose you have invested in 2 assets whose annual returns are shown in the following table. If you invest $1000 in each asset: What will be the value of each asset at the end of year 5? What is the single annual rate which would yield the same value at the end of year 5? (meaning, what is the geometric average annual rate of return?)   Year                                                                               Asset A Asset B 1 -6.01% -9.98% 2 -10.27% 12.30% 3 13.75% 18.15% 4 24.31% -1.69% 5 20.88% 5.00%                                                                                                                                                                                                                                    please use excel

Suppose an investor is interested in purchasing the following income producing property at a current market price of $ 1,490,000. The prospective buyer has estimated the expected cash flows over the next five years to be as follows: Year 1 = $88,000, Year 2 = $90,662, Year 3 = $91,923, Year 4 = $95,778, Year 5 = $97,000. Assuming that the required rate of return is 15% and the estimated proceeds from selling the property at the end of year five is $1,860,000, what is the NPV of the project? What is the IRR of the project?

Estimate the value of the property using the income approach based on the following facts: Net operating income annually for next 3 years is $400000 At end of three years, property is sold with an existing cap rate of 10% and a commission of 4% on sale The discount cap rate is the same as the existing cap rate and the operating income is assumed to be received at year end

Given the initial investment in a factory processing equipment as Ghc500,037. Let the opportunity cost of capital for the industry be 10% p.a. Assuming that the equipment is capable of generating an after-tax returns of Ghc115,000 for the first 5 years and Ghc65000 for the 6th year and Ghc53400 for the 7th year. Find the Net Present Value (NPV) Determine the Internal Rate of Return Identify three ways in which the Net Present value is superior to the Internal Rate of return as investment criteria

Consider an investment in which a developer plans to begin construction, of a building that will cost $2,000,000, in two years if, at that point, rent levels make construction feasible. There is a 40 percent chance that NOI will be $200,000 and a 60 percent chance that NOI will be $80,000 one year after the construction. Assuming 10 percent discount rate and an NOI growth rate of 5 percent, what would the land value be at the completion of the construction, under the real options approach?

1. The expansion plan of the business firm requires the purchase of a parcel of land on which to build a structure, which they need 5 years hence. The current cost are: land = P1M and building = P2M. Since these are not needed immediately, the firm plans to defer the purchase and the construction until they are needed. If the value of the land and building cost are expected to appreciate at the rates of 18% and 15% respectively compounded semi annually, what will the total cost after 5 years. 2. Quarterly deposits were made earning 20% compounded quarterly. The 1st deposit was P10k & each deposit thereafter was 5k greater than the previous. Determine the amount in the fund after 1 year of quarter deposit.

An investor is presented with an investment proposal which produces a continuous income stream of 10%, compounded continuously for 10 years. The rate of flow of the income from the investment is f(t) = 9000e0.04. 1) Determine the future value of the investment. 2) Compute the interest earned.

Consider a new residential income producing property for sale to a potential investor. The sale price for the property is Sh. 1,250,000 of which building is Sh. 1 million and balance land. Building is depreciated over 50  years. Rent is estimated at Sh. 200,000 in the first year and is expected to grow at 3% p.a. thereafter. Vacancies and collection losses are expected to be 10% of rent. Operating expenses will be 31.5% of rent. A 70% mortgage loan can be obtained at 11% p.a. payable monthly for 30 years. The property is expected to appreciate in value at 3% per year and is expected to be owned for five years and then sold. Tax rate for both income and capital gains is 30%. Required Calculate the expected after tax IRR on equity invested. Is this investment viable if required rate of return is 15%?

A project is estimated to cost P110,000, last 8 years and have a P15,000 salvagevalue. The annual gross income is expected to average P24,000 and annualexpenses, excluding depreciation, will total P6,000. If capital is earning 10% beforeincome taxes, determine if this is a desirable investment using A. Present Worth Method :B. Future Worth MethodC. Payback Period in years