10.Data for five comparable income properties that sold recently are shown below:

PropertyNOISale Price

A$ 57,800$ 566,600

B49,200496,900

C63,000630,000

D56,000538,500

E58,500600,000

What is the indicated overall rate (RO)?

A. 10.05

B. 13.05

C. 11.05

D. 14.05

11.In which way is the discounted cash flow valuation method similar to the direct capitalization method of valuation?

A. a holding period must be determined for eac

B. a required internal rate of return must be estimated

C. Both can be used on commercial property

D. net income projections must be made for each year

13.While there are several conventional approaches used to estimate the market value of real estate, which of the following is typically considered the most reliable approach especially for residential properties?

A. cost approach

B. income approach

C. investment approach

D. sales comparison approach

14.If a comparable property sells for $1,200,000 and the effective gross income of the property is $12,000 per month, the gross income multiplier is

A. 8.33

B. 5.99

C. 15.49

D. 7.00

16. An office building is purchased with the following projected cash flows:

NOI is expected to be $130,000 in year 1 with 5 percent annual increases.

The purchase price of the property is $720,000.

100% equity financing is used to purchase the property

The property is sold at the end of year 4 for $860,000 with selling costs of 4 percent.

The required unlevered rate of return is 14 percent.

Calculate the unlevered internal rate of return (IRR) and NPV

Hint: Create a Multi-year proforma,then calculate NPV, IRR)

A. 12.88%;-173,732

B. IRR=21.88% , NPV=173,732

C. 13.88% ; -173,732

D. 5.35% ; 173,732