Acquisition of a distressed property

Assignment Help Finance Basics
Reference no: EM131872222

An investor is considering the acquisition of a "distressed property" which is on Northwood Bank's REO list. The property is available for $200,000 and the investor estimates that he can borrow $170,000 at 9 percent interest and that the property will require the following total average monthly expenditures of $2,450.

a. The investor is wondering what such property must sell for after one year in order to earn ar return of 22 percent return (IRR) on equity?

b. What other issues must be consider in this analysis?

Reference no: EM131872222

Questions Cloud

Write two pages about accounting problems in any company : Write two pages about accounting problems in any company and how they solve it from newspaper websites
Oberon before-tax component cost of debt : What would be Oberon's before-tax component cost of debt? (Round your answer to 2 decimal places.)
Compute dow earnings per share for the year ended : Compute Dow's earnings per share for the year ended December 31, 2016.
Discuss a theme of the work illustrated in the quote : Identify work and author; Discuss a theme of the work illustrated in the quote; Relate the quote to the time period in which it was written.
Acquisition of a distressed property : An investor is considering the acquisition of a "distressed property" which is on Northwood Bank's REO list. The property is available for $200,000
Find a recent aricle from an online business newspaper : Search for a recent article (within 6 months) related to the topic of the week in an online business newspaper or business magazine of your choice.
The estimated required rate of return : the estimated required rate of return on Telus stock is 8.9 percent.
Floating-rate loans : The Bensington Glass Company entered into a loan agreement with the? firm's bank to finance the? firm's working capital.
What is the value of usc common stock today : If investors in companies of similar risk require a 12.0% rate of return, what is the value of USC common stock today?

Reviews

Write a Review

Finance Basics Questions & Answers

  Financial reporting and analysis

Finance is about Gunns Ltd, a company in dealing with forestry products in Australia. The company has also been listed in Australian Stock Exchange. As many companies producing forestry products, even Gunns Ltd is facing various problems. Due to the ..

  A report on financial accounting

This report is specific for a core understanding for Financial Accounting and its relevant factors.

  Describe the types of financial ratios

Describe the types of financial ratios and other financial performance measures that are used during venture's successful life cycle.

  Differences between sole proprietorship and corporation

Briefly describe the major differences between a sole proprietorship and a corporation

  Prepare a cash budget statement

Calculate the expected value of the apartment in 20 years' time. What is the mortgage loan repayment at the beginning of each month

  What are the implied interest rates

What are the implied interest rates in Europe and the U.S.?

  State pricing theory and no-arbitrage pricing theory

State pricing theory and no-arbitrage pricing theory

  Small business administration

Identify the likely stage for each venture and describe the type of financing each venture is likely to be seeking and identify potential sources for that financing.

  Effect of financial leverage

The Effect of Financial Leverage and working capital management

  Evaluate the basis for the payment to the lender

Evaluate the basis for the payment to the lender and basis for the payment to the company-counterparty.

  Importance of opps, ipps, mpfs and dmepos

Research and discuss the differences and importance of : OPPS, IPPS, MPFS and DMEPOS.

  Time value of money

Time Value of Money project

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd