Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

How much would I pay for the motel to earn 20% on my investment ?? 58) You have noticed an ad listing a motel for

image text in transcribed

How much would I pay for the motel to earn 20% on my investment ??

image text in transcribed

58) You have noticed an ad listing a motel for sale. After doing some research, you estimate that the 20 rooms can be rented for $60 per day with an occupancy rate of 80% per year. You have found a management company that will run the motel and take care of daily housekeeping for 10% of the rents. You estimate that repairs and maintenance costs will be $3,000 per month and that other cash expenses will be $4,000 per month. You plan to setl the motel at the end of the third year for $500,000. How much would you pay for the motel to earn A. $231,360 $ 776,708 c. $289,360 D. $487,356 E. None of the above

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Introductory Financial Accounting for Business

Authors: Thomas Edmonds, Christopher Edmonds

1st edition

1260299449, 978-1260299441

More Books

Students also viewed these Accounting questions

Question

4. What means will you use to achieve these values?

Answered: 1 week ago