Given the following information, calculate the break-even ratio on the following commercial property: Operating expenses: $650,000 Capital expenditures: $105,000 Potential gross income: $2,500,000 Debt service in first year: $960,000 Loan amount: $20,000,000 Purchase price: $27,300,000

1)

55.8%

2)

43.7%

3)

75.2%

4)

68.6%

What is a prepayment clause in a mortgage?

1)	It calls for 1/12 of annual real estate taxes and insurance payments to be included in the monthly payment.

2)	It permits the lender to accelerate the maturity date in the event the buyer sells the property.

3)	It permits the borrower to pay off the mortgage early under specific terms and conditions.

4)

It establishes the lender's priority to be paid off before any mechanics' liens.

Question 24 A mortgage loan of $175,000 has just been made on a property valued at $200,000. The net operating income of the property is $25,000, leaving BTCF of $8,978.45. What is the indicated annual mortgage constant?

1)

.044892

2)

.080108

3)

.091552

4)	Can not be determined with the information given.