Calculate the cumulative cash flows, Cost Accounting

Assignment Help:

Assume that you are the purchaser of the building at the end of the construction period, and you have paid the developer an amount which gives you a 7% annual return on net revenue generated by the building in its first year of occupancy.   

You do not pay tax, and you have paid for the building from your cash reserves - i.e. you are not borrowing money, nor are you charging yourself interest.  

Assume:  

(a) Gross rentals are reviewed every two years, and are increased by an amount relating to a CPI increase of 4% per annum.

(b) Outgoings increase annually by 5% per annum.  

(c) You make no further investment in the building.  

(d)  You calculate the building to command a 6.5% annual return to a buyer when it is sold at the end of the tenth year of operation.  

Calculate (over a 10 year period of ownership)  

1. Annual net cash flows.  

2. Cumulative cash flows.  

3. Net present value of the cash flows using a 12% discount rate.  

4. DCF rate of return for the project.


Related Discussions:- Calculate the cumulative cash flows

Material costs - cost accumulation, Material Costs - Cost Accumulation ...

Material Costs - Cost Accumulation However 'Materials' refer to the tangible inputs into the procedure of producing useful output.  They might be indirect materials or direct

Comment on the cash- flow impacts, Chester & Wayne is a regional food distr...

Chester & Wayne is a regional food distribution company. Mr. Chester, CEO, has asked your assistance in preparing cash-flow information for the last three months of this year. Sele

How much should the selling price be per unit, Pritchard Company manufactur...

Pritchard Company manufactures a product that has a variable cost of $30 per unit. Fixed costs total $1,500,000, allocated on the basis of the number of units produced. Selling pri

Cost component, Identify the individual cost components and the total cost ...

Identify the individual cost components and the total cost of delivering the product from supplier to retailer.   Identify each cost in terms of the incremental addition to the pro

Allocation of scarce resourses, LaNora White received her accounting degree...

LaNora White received her accounting degree in 1992. Since graduating, she has obtained significant experience in a variety of job settings. Her skills include auditing, income and

Compute the internal rate of return, ABC bond is a 20-year bond with face v...

ABC bond is a 20-year bond with face value $1000. The coupon payment is $25 per 6 months. The semi-annual yield is 4%. Use the PV function in Excel (or equivalent) to Önd the price

Find the amount of retained earnings at december, From the information prov...

From the information provided, determine: 1.) The amount of retained earnings at December 31 and 2.) The amount of revenues for the period. Additional data:1.)Expenses for the peri

Ppe, is ppe taxable

is ppe taxable

Target profit and break even analysis, Lindon Company is the exclusive dist...

Lindon Company is the exclusive distributor for an automotive product that sells for $43 per unit and has a CM ratio of 35%. The company''s fixed expenses are $421,400 per year. Th

Example of contract account, Example of Contract Account  A compa...

Example of Contract Account  A company has been awarded a contract to build a house.  It is a contract Number 45 for the company and the contract price is shs.2.65 millio

Write Your Message!

Captcha
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