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Financial analysis and evaluation week 4 fin591

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Financial Analysis and Evaluation
FIN591
February 8, 2021

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Assignment
a). Estimate the fair market value of the property
i) The value of the property can be estimated by calculating the total value of the
assets. In this case, it will involve the calculation of the start-up Assets, which include the
required cash, other current assets, and long-term assets. Therefore, the fair market value of
the property will be as follows:
44500 + 3500 + 5000 = 53000
The fair market value is 53000
ii) Secondly, in calculating the fair value of the property, a person can be including
some expenses incurred during setting up the property to the assets. Therefore, the fair market
value of the property will be as follows.
Expenses of setting up the property include Accounting and bookkeeping files,
expensed equipment, advertising, other expenses, insurance, and utilities. The total expenses
include the following.
800 + 1500 + 200 + 2000 + 8000 + 6500 + 8000 = 30000
Therefore, according to this method of estimation, the fair market value will be 83000.
b). The average of the fair market value
(80000 + 53000)/2 = 133000/2 =65500
c). Eventual selling price
The eventual selling price of the property will be 10% more or less than the average fair
market value.

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1 Financial Analysis and Evaluation FIN591 February 8, 2021 2 Assignment a). Estimate the fair market value of the property i) The value of the property can be estimated by calculating the total value of the assets. In this case, it will involve the calculation of the start-up Assets, which include the required cash, other current assets, and long-term assets. Therefore, the fair market value of the property will be as follows: 44500 + 3500 + 5000 = 53000 The fair market value is 53000 ii) Secondly, in calculating the fair value of the property, a person can be including some expenses incurred during setting up the property to the assets. Therefore, the fair market value of the property will be as follows. Expenses of setting up the property include Accounting and bookkeeping files, expensed equipment, advertising, other expenses, insurance, and utilities. The total expenses include the following. 800 + 1500 + 200 + 2000 + 8000 + 6500 + 8000 = 30000 Therefore, according to this method of estimation, the fair market value will be 83000. b). The average of the fair market value (80000 + 53000)/2 = 133000/2 =65500 c). Eventual selling price The eventual selling price of the property will be 10% more or less than the average fair market value. 3 The eventual selling price will be 58950 or 72050. This is because of either appreciation or depreciation. 4) Additional technique The fair market value can be subtracting the assets from the liabilities. This is given by 83000 – ...
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