You have been asked to develop a pro forma statement of cash flow for West Office Plaza. The information given to you is listed below.Property Information:WEST OFFICE PLAZARentable AreaAgeNumber of StoriesNumber of TenantsFinancial Information:Base Rent AverageOther Income/Parking/StorageExpenses Recoverable from TenantsCurrent VacancyExpenses:334,000 square feet8 yearsManagement/Administration/Security/OwnershipProperty TaxesInsuranceGeneral Operations/Leasing Expense/MarketingUtilitiesJanitorial/CleaningBusiness TaxesOther:Recurring CAPEX/Improvement AllowanceRevenueAdd:1540Less:Less: Operating expensesRequired:a. Develop a pro forma statement of cash flow for a base year showing net operating income (NOI) for West Office Plaza.WEST OFFICE PLAZATotal operating expensesCap expenses/Improvement allowance$20 per square feet$ 3.20 per square feet$ 4.20 per square feet5%$ 698,400$ 683,500$ 433,400$ 675,500$1,167,600$ 497,500$ 118,500$ 708,500

A cash flow statement's goal is to give a thorough description of what happened to a company's cash…

Answered: You have been asked to develop a pro…

Financial And Managerial Accounting

15th Edition

ISBN:9781337902663

Author:WARREN, Carl S.

Publisher:WARREN, Carl S.

Chapter26: Capital Investment Analysis

Section: Chapter Questions

Problem 2MAD: Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual...

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Assume San Lucas Corporation in MAD 26-1 assigns the following probabilities to the estimated annual net cash flows: a. Compute the expected value of the annual net cash flows. b. Determine the expected net present value of the equipment, assuming a desired rate of return of 10% and the expected annual net cash flows computed in part (a). Use the present value tables (Exhibits 2 and 5) provided in the chapter in determining your answer. c. Based on your results in parts (a) and (b), should San Lucas Corporation invest in the equipment?
Determining Cash Flows from Investing Activities Burns Companys 2019 and 2018 balance sheets presented the following data for equipment: During 2019, equipment costing $41,000 with accumulated depreciation of $36,700 was sold for cash, producing a $3,200 gain. Required: 1. Calculate the amount of depreciation expense for 2019. 2. Calculate the amount of cash spent for equipment during 2019. 3. Calculate the amount that should be included as a cash inflow from the disposal of equipment.
The following table indicates the net cash flows of a capital asset: Year Net Cash Flow 0 $-159,000 1 $59,000 2 $59,000 3 $59,000 4 $59,000 Do not enter dollar signs or commas in the input boxes. Round your answer to 2 decimal places. Calculate the cash payback period using the formula method. Payback: Answer years
The capital investment committee of Arches Landscaping Company is considering two capital investments. The estimated income from operations and net cash flows from each investment are as follows: Front-End Loader Greenhouse Year Income fromOperations Net CashFlow Income fromOperations Net CashFlow 1 $46,800 $144,000 $98,000 $230,000 2 46,800 144,000 75,000 194,000 3 46,800 144,000 37,000 137,000 4 46,800 144,000 16,000 94,000 5 46,800 144,000 8,000 65,000 Total $234,000 $720,000 $234,000 $720,000 Each project requires an investment of $520,000. Straight-line depreciation will be used, and no residual value is expected. The committee has selected a rate of 10% for purposes of the net present value analysis. Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636…
First United Bank Inc. is evaluating three capital investment projects using the net present value method. Relevant data related to the projects are summarized as follows: BranchOfficeExpansion ComputerSystemUpgrade ATMKioskExpansion Amount to be invested $686,053 $516,654 $295,458 Annual net cash flows: Year 1 411,000 288,000 177,000 Year 2 382,000 259,000 122,000 Year 3 349,000 230,000 89,000 Present Value of $1 at Compound Interest Year 6% 10% 12% 15% 20% 1 0.943 0.909 0.893 0.870 0.833 2 0.890 0.826 0.797 0.756 0.694 3 0.840 0.751 0.712 0.658 0.579 4 0.792 0.683 0.636 0.572 0.482 5 0.747 0.621 0.567 0.497 0.402 6 0.705 0.564 0.507 0.432 0.335 7 0.665 0.513 0.452 0.376 0.279 8 0.627 0.467 0.404 0.327 0.233 9 0.592 0.424 0.361 0.284 0.194 10 0.558 0.386 0.322 0.247 0.162 Required: 1. Assuming that the desired rate of return is 20%, prepare a net present value analysis for each project. Use the…
A machine with a cost of $144,000, accumulated depreciation of $92,000, and current year depreciation expense of $20,500 is sold for $45,600 cash. The amount that should be reported as a source of cash under cash flows from investing activities is:
Tasty Doughnuts has computed the net present value for capital expenditure at two locations. Relevant data related to the computation are as follows: Des Moines Cedar Rapids Total present value of net cash flow $194,880 $254,100 Amount to be invested (203,000) (242,000) Net present value $(8,120) $12,100 a. Determine the present value index for each proposal. Round your answers for the present value index to two decimal places. Des Moines Cedar Rapids Total present value of net cash flow $fill in the blank 1 $fill in the blank 2 Amount to be invested $fill in the blank 3 $fill in the blank 4 Present value index fill in the blank 5 fill in the blank 6 b. Which location does your analysis support? (If both present value indexes are the same, either location will grade as correct.) , because the net present value index is 1.
The following proforma shows unleveraged cash flows for a property if an investor were to purchase it today and resell it at the end of the third year: (Show answer in Excel) What is the present value of the each of the discounted cash flows from Year 1, Year 2, and Year 3, using a discount rate of 8.75% (hint: calculate each on separately)? What is the Net Present Value of this investment?
using the image attached , please prepare the cash flow statement for the year. Also alongside the given image the following additional infromation should be noted for the account as well : 1. The building was revalued during the year.2. Equipment costing 25,000 for which there a provision for depreciation of 5,500was sold for a profit of 6,000.3. Dividends paid and proposed for the year amounted to 27,000
A building with a book value of $35,892 is sold for $53,310 cash. Using the indirect method, choose how this transaction should be shown on the statement of cash flows. Select the correct answer. -an increase of $53,310 from investing activities and a deduction from net income of $17,418 -an increase of $35,892 from investing activities -an increase of $53,310 from investing activities -an increase of $35,892 from investing activities and an addition to net income of $17,418
Your goal is to prepare a Statement of Cash Flows within the problem noted below. In the Excel Template provided, you will find the Balance Sheet of Marina Comp for December 31, 2013. In addition to the information on the Balance Sheet, we are presented with the following additional data related to current year operations: 1. Net income for the year 2013, $66,000. 2. Depreciation on plant assets for the year, $12,700. 3. Sold the long-term investments for $28,000 (assume gain or loss is ordinary). 4. Paid dividends of $25,000. 1 / 2 5. Purchased machinery costing $21,500, paid cash. 6. Purchased machinery and gave a $60,000 long-term note payable. 7. Paid a $40,000 long-term note payable by issuing common stock.
When preparing the Statement of Cash Flow using the indirect method for the current year, which of the following statements would describe the proper presentation of a decrease in the Investment account of $100,000 which occurred because of the sale of the Investment for cash of $125,000 ( a gain of $25,000)? Group of answer choices Add the $100,000 as Cash received from the sale of investment in the Cash flow from Investing Activities section of the Statement of Cash Flow. Less the $100,000 as Cash paid for the sale of investment in the Cash flow from Investing Activities section of the Statement of Cash Flow. Add the $125,000 as Cash received from the sale of investment in the Cash flow from Investing Activities section of the Statement of Cash Flow. Less the $125,000 as Cash paid for the sale of investment in the Cash flow from Investing Activities section of the Statement of Cash Flow.

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