Suppose You Are Interested in Selling Your Home and Would

question 29

Multiple Choice

Suppose you are interested in selling your home and would like to clear a net value of $300,000. If you have agreed to pay your broker a commission of 5.5% (no matter who ultimately is responsible for finding the buyer) , what price must you sell the home for in order to meet your net profit (rounded to the nearest dollar) ?

• A) $282,540
• B) $300,000
• C) $316,500
• D) $317,460

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Definitions:

Present Value

The present worth of a future sum or series of cash flows when calculated using a given return rate.

Intangible Asset

An asset that lacks physical substance but is identifiable and provides future economic benefits.

Purchase Price

The amount paid to acquire an asset, including all costs directly attributable to bringing the asset to its intended use.

U.S.GAAP

The Generally Accepted Accounting Principles in the United States, a standard framework of guidelines for financial accounting.