REAL 4000 Test 2 Dietz; Questions & Answers 100% Solved
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REAL 4000 UGA
Institution
REAL 4000 UGA
REAL 4000 Test 2 Dietz; Questions & Answers
100% Solved
Value of a property or mortgage thus depends on: Correct answer-1. Magnitude
2. Timing
3. Riskiness
of expected cash flows
TVM timelines always starts with Correct answer-- "Time Zero"
Mortgage (debt) timelines normally Correct answer...
REAL 4000 Test 2 Dietz; Questions & Answers
100% Solved
Value of a property or mortgage thus depends on: Correct answer-1. Magnitude
2. Timing
3. Riskiness
of expected cash flows
TVM timelines always starts with Correct answer-- "Time Zero"
Mortgage (debt) timelines normally Correct answer-30 years
Most commercial property ownership Correct answer-3-7 years
Amount at time "zero" Correct answer-PV
A single cash flow at any future time point Correct answer-FV
A repeating amount of cash inflow or outflow, flow normally begins at end of first period,
sometimes at time zero Correct answer-PMT
This is the measure of time and the number of computations (compounds) Correct
answer-N
, REAL 4000 Test 2 Dietz; Questions & Answers
100% Solved
Interest Rate, required return, rate of return, opportunity cost, discount rate, IRR, etc. This is
some sort of rate (%) of return (yield) based on risk Correct answer-I/Y
a fixed amount of money paid or received at the end of every period. Often another name for
fixed PMT. Correct answer-Ordinary annuity
Any future cash inflow or outflow occurring only once (often another name for FV).
Correct answer-Lump sum payment
(1 + r)^n Correct answer-FV of Lump Sum Formula
(1 + r)^n - 1 / r Correct answer-future value of an annuity formula
1 / (1 + r)^n Correct answer-Present value of a lump sum
1-[1/(1 + r)^n] / r Correct answer-Present value of annuity
ways to solve for time "zero" Correct answer-1. find the PVs of six different cash flows
and sum the results
2. PV of a five-year $10,000 annuity + PV of a lump sum of $100,000 in year 5
3. Solve as a combined PV problem
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