Which of the following factors can influence cash-on-cash return calculations?

Cash-on-cash return is a financial metric commonly used to assess the return on investment for properties, specifically in real estate. This calculation is influenced by a variety of factors, with operational expenses playing a crucial role.

Operational expenses encompass all the costs necessary to manage and maintain a property, such as maintenance, property management fees, utilities, taxes, insurance, and repairs. These expenses are deducted from the gross income generated by the property to determine the net operating income, which is then used in the cash-on-cash return formula. As operational expenses increase, they reduce the net income, thereby decreasing the cash-on-cash return. Conversely, lower operational expenses can lead to a higher cash-on-cash return, making it a critical aspect of the calculation.

The other factors mentioned, while they may have an impact on the overall financial performance of real estate investments, do not directly influence the cash-on-cash return formula. Seasonal market trends can affect cash flows but are generally external market conditions rather than direct expenses. The number of employees typically pertains to staffing for property management and may indirectly affect operational expense calculations, but it is not a direct factor in cash-on-cash return. Lastly, sales prices of similar properties relate more to market valuation than to