A property project produces an after-tax return of 8.5% on total funds invested. The investor can borrow funds for this project at 7.5% and the investor’s marginal tax rate is 35.5%. Assuming an LVR (loan to value ratio) of 70%, the after-tax return on equity is: a. 17.05% b. 19.44% c. 9.05% d. 12.78% e. 21.34%

A property with a trailing cap rate of 5.7% was purchased for $28,480,000. The purchase was financed using an interest-only debt of 70% at an interest rate of 5.85% per annum. Capital improvements are $238,000 and structural reserves are $115,000 in Year 1. The income return on equity (ROE) for this property at the end of Year 1 is:

An entity has revalued its property and has recognized the increase in the revaluation reserve in its financial statements. The carrying value of the property was GHS8 million, and the revalued amount was GHS10 million. Tax base of the property was GHS6 million. In the country, the tax rate applicable to profits is 35% and the tax rate applicable to profits made on the sale of property is 30%. Where will the tax liability be recognized and at what amount?a.In equity at GHS1.2 million.b.In statement of recognized income and expense at GHS1.4 million.c.In retained earnings at GHS700,000.d.In the income statement at GHS600,000.Clear my choice

The tax benefit is achieved inQuestion 13Answera.Equity Financingb.Debt Financingc.Short term Financingd.Medium Term Financing

An investment property is purchased for $18,540,000 with 50% equity and an interest-onlyloan to finance the balance. The average appreciation rate of the property is 5% per annumAll operating costs, including finance costs, are exactly equal to rent income. If the property issold after 10 years and selling costs are 3% of the sale price (based on market valuation ofdetermined from the annual rate of appreciation), the ROE (return on equity) is.

A project has the following net profit after tax set out below. The average book value of the assets in the project is 110,092. What is the accounting rate of return of this project? Enter your final answer in decimals to four decimal places (e.g., if your answer is 5.55%, then enter 0.0555). Year Net Profit After Tax 1 5,963 2 7,772 3 8,523 4 10,145