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hello, i need help with the calculation and why it is ? i just need a little explanation to get it and if you can
hello, i need help with the calculation and why it is ? i just need a little explanation to get it and if you can put it in excel so i can understand the formulas you used.
1. You are considering a purchase of two practically identical properties. Both properties have and are expected to generate the same net income. Property (1) has a cap rate of 9 while property (2) has a cap rate of 7. It is reasonable to assume that property (1) is overvalued relative to property (2). True False 8.33333 points QUESTION 2 1. You are searching for a commercial property to buy in Brooklyn. You have narrowed your search down to three properties. Property (1) has a cap rate of 7, property (2) has a cap rate of 8, and (property (3) has a cap rate of 6. Property (3) must be the better choice because the cap rate implies that property (3) has the highest net operating income of the three properties. True False 8.33333 points 1. QUESTION 3 Property managers can do nothing to increase property cap rates since cap rates are determined by market forces. True False 8.33333 points QUESTION 4 1. The risk associated with a property's net income will affect its cap rate. True False 8.33333 points 1. QUESTION 5 You should never buy an income producing property that has a cap rate that is low relative to other properties in the neighborhood. True False 8.33333 points QUESTION 6 1. Use Excel to solve this problem. rate nper pv fv type 10% 30 $350,0 00 0 0 The periodic payment the borrower will have to make is greater than $42,185.23 True False 8.33333 points 1. QUESTION 7 rate nper pv fv type 10% 30 $350,0 00 0 0 2. 3. 4. 5. If the rate increases from 10% to 15% the periodic payment will increase by less than 50%. Use Excel to solve this problem. 6. True 7. False 8.33333 points 1. QUESTION 8 Use Excel to solve this problem rate nper pv fv type 10% 30 $350,0 00 0 0 2. 3. 4. If the number of periods is reduced to 15 from 30 the periodic payment will double. True 5. False 8.33333 points 1. QUESTION 9 rate nper pv fv type 2. 3. 4. 10% 30 $350,0 00 0 0 The interest payment at the end of period 2 is greater than the interest payment at the end of period 7. You should use Excel to solve this problem. 5. True 6. False 8.33333 points 1. QUESTION 10 rate 10% nper pv fv type 2. 30 $350,0 00 0 0 The principal payment at the end of period 2 is greater than the principal payment at the end of period 7. 3. 4. True 5. False 8.33333 points QUESTION 11 1. cash flows time 0 $400,000 .00 1 $75,000 2 $75,000 3 $75,000 4 5 $75,000 $75,000 6 $75,000 7 $75,000 8 $75,000 9 $75,000 10 $525,000 discou nt rate 25% 2. 3. You are working for a real estate investment firm. The rule is the following: Invest in properties that have a positive net present value based on ten-year cash flow projections. Should you invest in this project? 4. Ye s No 8.33333 points 1. QUESTION 12 cash flows time 0 $400,000 .00 1 $75,000 2 $75,000 3 $75,000 4 5 $75,000 $75,000 6 $75,000 7 $75,000 8 $75,000 9 $75,000 10 $525,000 discou nt rate 10% 2. 3. 4. You are working for a real estate investment firm. The rule is the following: Invest in properties that have a positive net present value based on ten-year cash flow projections. Should you invest in this project? Ye s NoStep by Step Solution
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