Which of the following is not normally included as one of the advantages of real estate as an investment - ANSWERLiquididty
Which of the following terms refers to the cash flow a real estate investor can put in his or her pocket at the end of the year - ANSWERATCF
The deduction of tax depreci...
Which of the following is not normally included as one of the advantages of real estate as an
investment - ANSWERLiquididty
Which of the following terms refers to the cash flow a real estate investor can put in his or her pocket
at the end of the year - ANSWERATCF
The deduction of tax depreciation from taxable income tends to _______ the capital gains upon sale
of the property - ANSWERincrease
Under the current tax law, residential real estate investments have a depreciable life of how many
years - ANSWER27.5
In a cash-flow projection, the net operating income is determined by starting with the gross potential
income, calculating the gross effective income, and then - ANSWERdeducting operating expenses
according to the net present value decision rule, an investor who is considering a project which has a
net present value of $1 - ANSWERaccept the investment
Negative leverage occurs when the return on equity of the project _________ with the use of
_________ - ANSWERincrease, debt
the investor's required rate of return is the same as the interest rate on available mortgage loans -
ANSWERfalse
financial leverage occurs from all cash purchases - ANSWERfalse
financial decision making is based on the concept of wealth maximization - ANSWERtrue
the internal rate of return is the interest rate for which a project's net present value (NPV) is exactly
equal to zero - ANSWERtrue
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