FSU REE4204 Exam 3 Sirmans Exam Questions With Revised Answers
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Course
FSU REE4204
Institution
FSU REE4204
FSU REE4204 Exam 3 Sirmans Exam
Questions With Revised Answers
The use of debit in income-producing real estate can alter the value of:
a. amount risk of the cash flow to bankers
b. amount of cash flows to equity investors
c. risk of cash flows to equity investors
d. b and c
e. a and b - ans...
FSU REE4204 Exam 3 Sirmans Exam
Questions With Revised Answers
The use of debit in income-producing real estate can alter the value of:
a. amount risk of the cash flow to bankers
b. amount of cash flows to equity investors
c. risk of cash flows to equity investors
d. b and c
e. a and b - answer✔✔D
The following is a NOT a proper list of potential commercial properties:
a. hotels, motels, urban office buildings
b. suburban office buildings, shopping malls, strip centers
c. warehouses, mini-warehouses, theme parks
d. restaurants, fast-food facilities, nursing centers
e. hospitals, apartment complexes, casinos, public schools - answer✔✔E
A key non-real estate source of property cash flow is:
a. tax shelter
b. managerial talent
c. use of equity financing
d. debt financing
a. the left side of the balance sheet
b. the use of debt to finance real estate
c. the use of equity to finance real estate
d. a and b
e. b and c - answer✔✔B
Investors purchase multiple properties to:
a. diversify a portfolio
b. maximize investment return
c. minimize risk
d. a and b
e. all of the above - answer✔✔E
Positive leverage is defined as the use of debt at a cost ________________ than the return on the
asset which __________________ the return on equity.
a. decreases, increases
b. less, increases
c. increases, decreases
d more, decreases
e equal, increases - answer✔✔B
Using the formula ROE = [NOI - rD] /Equity, the term positive leverage implies that the return
On equity is ________________ than the return on assets if the cost of debt "r" is ___________
than ROA where ROA = NOI/EQUITY.
a. greater, less
b. less, greater
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