Table of contents

1. Introduction to Accounting1h 21m
2. Transaction Analysis1h 13m
3. Accrual Accounting Concepts2h 38m
4. Merchandising Operations2h 30m
5. Inventory1h 55m
6. Internal Controls and Reporting Cash1h 16m
7. Receivables and Investments3h 8m
8. Long Lived Assets5h 1m
9. Current Liabilities2h 19m
10. Time Value of Money1h 23m
- Time Value of Money Equations
  35m
- Using Time Value of Money Tables
  47m
11. Long Term Liabilities2h 45m
12. Stockholders' Equity2h 15m
13. Statement of Cash Flows2h 24m
14. Financial Statement Analysis5h 25m
15. GAAP vs IFRS56m

4. Merchandising Operations

Net Sales

Financial Accounting

4. Merchandising Operations

Net Sales

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Multiple Choice

What is the result of multiplying the gross rent multiplier (GRM) by the monthly rent?

Net sales revenue

Estimated property value

Total annual expenses

Gross profit margin

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Verified step by step guidance

Understand the concept of Gross Rent Multiplier (GRM): GRM is a valuation metric used in real estate to estimate the value of a property. It is calculated as the ratio of the property's price to its annual rental income.

Identify the formula for estimating property value using GRM: The formula is Property Value = GRM × Annual Rent. Since the problem mentions monthly rent, you need to convert monthly rent into annual rent by multiplying it by 12.

Convert the monthly rent into annual rent: Multiply the given monthly rent by 12 to calculate the annual rent. Use the formula Annual Rent = Monthly Rent × 12.

Multiply the GRM by the annual rent: Use the formula Property Value = GRM × Annual Rent. Substitute the GRM and the calculated annual rent into the formula.

Interpret the result: The product of GRM and annual rent gives the estimated property value, which is the correct answer to the problem.