Please answer all of the attached questions. Please answer all of the attached questions..

Suppose you have developed the following information for a potential investment: current value is $1,000,000; anticipated loan to value ratio is 0.75; two discount points; and predicted cash flows of ATCF1= $38,560, ATCF2 = $41,780, ATCF3 = $45,210, and ATER3 = $201,730. Assume the investor's minimum required after-tax rate of return is 15%. What is the cash flow at acquisition (original cost to the investor)? 1) $250,000 2) $235,000 3) $265,000 4) none of the above Save Question 2 (2 points) Using the information from the previous question, the net present value is 1) -$37,511 2) -$22,511 3) $62,280 4) none of the above Save Question 3 (2 points) Calculate the going-in capitalization rate for the following investment. 1st year NOI: $18,750 Acquisition price: $150,000 Equity: 20% 1) 10% 2) 12.5% 3) 14% 4) 15% Save Question 4 (2 points) Diversification within real estate investments can be accomplished 1) By type of project. 2) By geographic location. 3) Both 1 and 2 4) Neither 1 nor 2. Save Question 5 (2 points) If a potential investor estimates the market value of an industrial park to be $10,000,000 and can obtain a loan with the following terms: loan to value of 75%, interest rate of 11%, and 20 years with 3 discount points. The estimated remaining discount expense that can be taken as a tax deduction as a result of a sale after a 7 year holding period is 1) $11,250 2) $78,750 3) $146,250 4) $225,000 5) none of the above. Save Question 6 (2 points) Adjusted basis is obtained by Subtracting cumulative depreciation from original 1) property cost and adding any capital expenditures. 2) Subtracting cumulative inflation from original property cost. 3) Subtracting the mortgage balance from original property cost. Subtracting cumulative mortgage 4) interest from original property cost. Save Question 7 (2 points) Under current income tax law, the recovery period for taking depreciation on a residental property is 1) the estimated life of the property. 2) 15 years. 3) 19 years. 4) 27.5 years. 5) 39 years. Save Question 8 (2 points) Suspended losses are losses that 1) can never be used to offset income. 2) exceed the yearly allowable passive income writeoff. can be used to offset taxable gain at the end of the holding period as 3) long as they do not exceed $25,000. 4) 2 and 3. Save Question 9 (2 points) Which of the following is NOT a requirement of the 1031 exchange? any cash or personal property received in an exchange is fully 1) taxable in the year of the exchange 2) the properties must be like-kind 3) the properties must be trade or business or investment properties 4) the seller must own a personal residence Save Question 10 (2 points) Income earned from salaries or bonuses is known as what? 1) portfolio income 2) active income 3) passive activity income 4) none of the above Save Question 11 (2 points) A landlord signs a new lease with tenant that includes a provision allowing $8 per square foot for changing the floor plan and adding more electrical and network capability to the space. What is the name for this provision? 1) space allowance 2) tenant improvement allowance 3) extra incentive 4) capital expense fee Save Question 12 (2 points) Given the following information, what is the required amount of cash due at the close of the loan? Acquisition price: $800,000 Down payment: 25% Financing cost: 3% 1) $118,000 2) $200,000 3) $218,000 4) $250,000 Save Question 13 (2 points) Sources of pecuniary returns include 1) Tax shelters. 2) Capital gains. 3) Cash flow. 4) All of the above. Save Question 14 (2 points) The rationale behind IRS allowance of depreciation deductions is 1) Recoupment of capital in wasting assests. 2) To provide tax relief for real estate investment. 3) To promote more affordable real estate ownership. 4) All of the above. Save Question 15 (2 points) A taxable loss implies a negative before tax cash flow to the investor. 1) True 2) False Save Question 16 (2 points) Calculate the gross income multiplier for the following investment. Effective gross income: $49,500 Before-tax cash flow: $11,440 Acquisition price: $520,000 Equity: 20% 1) 9.5% 2) 8.75% 3) 10.6% 4) 11.25% Save Question 17 (2 points) For income tax purposes, discount expense for a mortgage is 1) amortized over the life of the loan. 2) amortized over the holding period. 3) deductible in the year paid. 4) not deductable Save Question 18 (2 points) When net present value is zero, the IRR is equal to the required rate of return. 1) True 2) False Save Question 19 (2 points) Under the current income tax law, the income generated from rental property, such as apartments, is classified as 1) active income. 2) ordinary income. 3) passive income. 4) portfolio income. Save Question 20 (2 points) In order for a property to qualify for the capital gains tax rate in the year of the sale, it must be held for how long? 1) 12 months 2) 6 months 3) 30 days 4) 10 years Save Question 21 (2 points) Before tax cash flow is obtained by 1) Subtracting annual debt service from net operating income. 2) Subtracting operating expenses from net effective income. 3) Subtracting annual debt service from net effective income. 4) Subtracting expenses from net operating income. Save Question 22 (2 points) After-tax cash flow is always less than before cash flow. 1) True 2) False Save Question 23 (2 points) Which of the following is equal to beforetax equity reversion? 1) Net operating income Debt service 2) Net selling price remaining mortgage balance 3) Gross operating income Operating expense 4) Net selling price Capital gain Save Question 24 (2 points) Capital gains income 1) Is taxed at the same rate as ordinary income. 2) Is profit received from the sale or exchange of capital assets. 3) Is closely controlled by the Federal Trade Commission. 4) Is based on a percent of the net present value of an investment. Save Question 25 (2 points) For a given income property you have estimated for the first year of the holding period that NOI is $200,000, debt service is $157,300 (of which $7,300 is principle), and depreciation is $40,000. If the equity investor is in the 28% tax bracket, the first year ATCF is 1) $39,900 2) $41,944 3) $42,700 4) $47,200 5) none of the above. Save