1. If operating expenses are $250,000, potential gross income is $650,000, and the maximum acceptable default ratio is .85, the largest mortgage loan the property will support with an annual debt service constant of .105 is:(Points : 5)

less than $2.9 million

between $2.9 million and $3.1 million

more than $3.1 million

not determinable with available information

2.A property has a net operating income of $220,000. A lender offers aneight percent, 20-year, fully amortizing mortgage loan (requiring monthly payments; annual constant of .1003728) in an amount that will result in a debt coverage ratio of 1.3 and a loan-to-value ratio of 70 percent. What is the value of the property?

3.An apartment house was purchased on July 8 of last year by a taxpayer who computes her taxes on a calendar basis. Her depreciation deduction last year was $9,375. The building accounted for 75 percent of the property's market value at the time of purchase, what was the taxpayer's initial tax basis in the property?

4.A project is expected to generate an annual cash flow of $300,000 before debt service, during each of the first five years of operation. This expectation represents the mean of a probability distribution of possible cash flows, and has a standard deviation of $25,000. What is the maximum purchase price which can be financed with aeight percent, 25-year, fully amortizing monthly payment loan, if the investor insists on a .95 probability that the annual cash flow during the first five years will be sufficient to at least cover the debt service?