1. Decisions makers in the real estate market include users and investors. Which of the following statements are true?

	1.	Users make decisions regarding the space they will need to use for their business; Investors are primarily interested in receiving a return on investment.
	2.	Typically, users compare investment alternatives using equity capital and strategy.
	3.	Holding decisions by users do not include CAPEX expenditures.

2. Components of the Cash Flow Model include the following:

	1.	Initial Investment
	2.	Annual Cash Flows
	3.	Sales Proceeds
	4.	Holding Period
	5.	All of the above..

3. The cap rate is what investors are willing to pay for a dollar of net operating income (NOI). The value of the property is found as follows:

	1.	PRI - Debt = Value
	2.	Value = NOI/cap rate
	3.	Value/cap rate = NOI
	4.	NOI + Vacancy Rate = Cap Rate

4. The Cash Flow Model without financing and before tax:

	1.	Takes the first and second mortgages into consideration.
	2.	The net operating income equals the cash flow before tax.
	3.	The NOI and the sales price are equal.
	4.	All of the above.

5. A quick calculation to determine the value and performance of a property is:

		Cap Rate x Value = Net Operating Income (NOI)
		Gross Rent Multiplier (GRM) x Potential Rental Income (PRI) = Investment Value
		Mortgage - Debt Service = Annual Debt Coverage
		None of the above.

6. An investor is considering purchasing a property with a forecasted first-year NOI of $85,000. The established cap rate is 8.75 percent based on similar properties. What would the investor consider paying for the property?

	1.	$7,438
	2.	$85,000
	3.	$875,000
	4.	$971,429