Cost $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ \$ 22,000,000 \quad \$ 22,800,000$ -Consider the Table Above

question 19

Multiple Choice

$\begin{array}{lrr}Units&275&300\\\\\text { Gross Revenue } & \$ 3,267,000 & \$ 3,564,000 \\\text { Vacancy } & 163,350 & 178,200 \\\text { Expenses } & \underline{1,143,450} & \underline{1,247,400} \\ \text { Net Operating Income } & \$ 1,960,200 & \$ 2,138,400\\\\\end{array}$
Cost $~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~ \$ 22,000,000 \quad \$ 22,800,000$
-Consider the table above. An investor-developer demands a return of at least 9 percent on cost. Which of the following statements is TRUE based on the information above?

• A) Neither project produces a sufficient expected return
• B) The 275 unit project produces a sufficient return, but the 300 unit project does not
• C) The 300 unit project produces a sufficient return, but the 275 unit project does not
• D) Both projects produce sufficient return, but the 275 unit project produces a higher return than the 300 unit project

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Definitions:

Income Statement

A financial statement that shows a company's revenues and expenses over a specific period, indicating profit or loss.

Partners' Capital Statement

A financial statement that shows the changes in each partner’s equity in the business over a specific period of time.

Drawings

Withdrawals of cash or other assets from a business by the owner for personal use.

Capital Statement

A financial statement that outlines the changes in owners' equity over a specific period.