Operation

Parsa Real Estate is a company that buys and rents real estate. The company is looking into buying an office building for $1M.Thebuilding has 10,000 square feet of rentable office space.

The company analysts predict that they can rent the office space for $6 per square foot per month, but demand is a function of price in the following way:

%Occupied=2L0.2*Rent

(Rentisindollarspersquarefootpermonth.Also,at$6.00,Oscarthinkshecanfillabout80% Of the office space.)
The building needs to be maintained (security, insurance, maintenance, etc.), which costs $10,000 per month regardless of occupancy. Also, there is a variable cost of $2 per month for each square foot occupied.

Define there turn on invested capitals the ratio of the profits (PERYEAR)and the invested capital. You can drawan ROIC tree in the same way that we drew a KPI tree in class.Simply have the ROIC as“the root”of the tree instead of profits. Then answer the following questions.

Question 3
HINT: ROIC = (revenues - costs) / invested capital. Use occupancy rate to determine revenues; use fixed and variable costs to determine costs

Question 4
New ROIC (in decimal form):
ROIC = (revenues - costs) / invested capital

  1. 0
  2. 6
asked by Nilu
  1. Indicate your specific subject in the "School Subject" box, so those with expertise in the area will respond to the question.

    posted by PsyDAG
  2. cd

    posted by dcd

Respond to this Question

First Name

Your Response

Similar Questions

  1. personal finance

    If you want a risk-proof real estate investment, invest in: A. real estate investment trusts. B. real estate limited partnerships. C. participation certificates (PCs). D. real estate syndicates.
  2. math

    vivian sold her home through a real estate company. Vivial received $140,000 after she paid the real estate agent a 6% commission. What was the selling price of her home?
  3. business

    A company has the following alternatives on some real estate that it needs for its new plant. It can lease the facility for $10,000 a month for 15 years, or it can buy the facility now for $800,000. The company’s weighted
  4. business

    A company has the following alternatives on some real estate that it needs for its new plant. It can lease the facility for $10,000 a month for 15 years, or it can buy the facility now for $800,000. The company’s weighted
  5. Economics

    I need help finding two sources about real estate monetary and fiscal policies. The sources need to help me answer the following questions... How have these policies affected... 1. employment rates for real estate? 2. growth of
  6. Math

    a real estate broker earns a salary of & 21,000 plus 2.5% of the value of any real estate sold. Last year the broker earned $ 52,000. What was the total vaule of all real estate sold by the broker.
  7. English 1

    In the sentences name the subject and the verb. 1) He applied for one on Tuesday. 2) The position is with a real estate company. 3) The company has an excellent reputation. 4) It pays its employees well and offers great benefits.
  8. Managarial Finance

    "Stephenson Real Estate Company was founded 25 years ago by the current CEO, Robert Stephenson. The company purchases real estate, including land and buildings, and rents the property to tenants. The company has shown a profit
  9. math

    If Eve's house has an assessed value of $76,320 and a real estate tax rate of $2.98 per $100, what will she pay in real estate tax?
  10. Math

    A real estate company owns 218 efficiency apartments, which are fully occupied when the rent is $940 /month. The company estimated that for each $25 increase in rent, 5 apartments will become unoccupied. What rent should be

More Similar Questions