$1.$Which of the following primarily contributes to the decision to invest?

Group of answer choices

the present value of future cash flows discounted at the market capitalization rate

the present value of future cash flows including before$-$tax capital gains

the present value of future cash flows including the equity at reversion

the present value of future cash flows not including the equity at reversion

$2.$ What impact does a high Capitalization Rate typically have on the risk and potential return of a real estate investment?

Group of answer choices

A high Cap Rate is unrelated to risk but indicates a higher potential return

A high Cap Rate often suggests a higher risk but potentially higher return.

A high Cap Rate signifies lower property value with no relationship to risk or return.

A high Cap Rate usually indicates a lower risk and lower potential return.