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exam2 - Assignment Example

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Finance and Accounting Name of the of the Professor University Date Table of Contents Introduction 3 Question 1 3 Question 2 4 Question 3 5 Question 4 6 Conclusion 9 References 10 Introduction The project deals with a company located in Findlay, Ohio…

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exam2

At that time, the rent would be $ 10000 per month. The next question which arises is that, whether the entire amount of $ 4000000 would be given from internal sources of financing or an external loan should also be taken. If external loan is taken, then it would be obtained to an amount of $ 2000000 having an interest of 5% per year. If the building is constructed in 2017, then the accumulated amount of $ 4000000 can also be invested and an interest on such investment @ 3.5% would be obtained. The cost of the building would also be incrementing by 2.5% per year. Return on Investment has been calculated by taking into consideration that the interest rate on the investment of $ 4000000 is 3.5%. Question 1 Return on Investment Particulars Amount (in $) Invested Amount 4000000 Return on Investment for the year 2013 (from October to December) 35000 Return on Investment for the year 2014 140000 Return on Investment for the year 2015 140000 Return on Investment for the year 2016 140000 Total Return on Investment 455000 Return on Investment (in Percentage) 11.375% The return on investment is a performance measure that is used for evaluating the efficiency and accuracy of any investment (Megginson & Scott, 2008). ...
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