Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

You are the judge in a settlement case. You need to compute the value of a piece of land in Denver Co. The valuation is

You are the judge in a settlement case. You need to compute the value of a piece of land in Denver Co. The valuation is subject to the following conditions

1.The settlement will take place at the end of 2019

2.The current appraised value of the land on 1/1/2018 is $500.000

3.The piece of land has a building on it that is uninhabitable . It takes one year to bring the building down at a cost of $100,000. That money must be paid now.

4.The land can be rented in 2019 at a net proceeds of 40,000

5.While rented the land cost $20,000 in property taxes

6.Your real estate adviser notes that selling prices of comparable lands in Denver have declined, in real terms, at an average rate of 3% per year over the last 5 years.

7.The cost of capital is 10%

8.The sale of the land at the end of 2019 is subject to a 10 % commission.

What should someone pay today for this land if given the choice?

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

Step: 3

blur-text-image

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

The Legal And Ethical Environment Of Business

Authors: Gerald R. Ferrera, Mystica M. Alexander, William P. Wiggins, Cheryl Kirschner, Jonathan J. Darrow

2nd Edition

1454893028, 9781454893028

More Books

Students also viewed these Finance questions

Question

Describe Yaloms therapeutic factors for group psychotherapy.

Answered: 1 week ago