6. Calculate the estimated terminal value of the property at the end of its holding period. Going-out cap rate: 9%, estimated holding period: 5 years, NOI for year 5: $100,500, NOI for year 6: $102,000.

a. $1,113,333

b. $1,116,667

c. $1,133,333

d. $1,166,667

7. Calculate the before-tax equity reversion. NOI: $89,100; Annual Debt Service: $58,444; Net Sale Proceeds: $974,700; Remaining Mortgage Balance: $631,026

a. $30,656

b. $343,674

c. $572,674

d. $885,600

8. Calculate the going-out cap rate. Estimated holding period: 5 years; NOI for year 1: $120,000; NOI for year 5: $150,000; NOI for year 6: $155,250; Expected sale price at end of year 5: $1,350,000.

a. 8.9%

b. 11.1%

c. 11.5%

d. 11.9%

9. Calculate the NPV for a property with the following details: Initial cash outflow: $200,000; Discount rate 15%; CF for year 1: $25,876; CF for year 2: $23,998; CF for year 3: $23,013; CF for year 4: $22,105; CF for year 5: $144,670.

a. -$51,875

b. -$59,657

c. $140,343

d. $295,951

10. You have purchased a rental house for $95,000 five years ago. In Year 1, you negotiated a five-year lease that paid $10,000 per year at the end of each year. If you sell the property at the end of five years for $100,000, what was the internal rate of return (IRR) on this investment?

a. -18.18%

b. 1.03%

c. 9.57%

d. 11.37%

11. You are requesting advice on a potential investment opportunity involving an apartment complex. You must determine the internal rate of return of the investment opportunity based on the following information:

Expected Holding Period: 5 years

End of first year NOI estimate: $113,900

NOI estimates in subsequent years will grow by 5% per year

Price at which the property is expected to be sold at the end of year 5: $1,615,205.22

Current market price of the property: $1,475,667.71

a. -15.30%

b. 8.60%

c. 9.86%

d. 10.00%