QUESTION 19 Which of the following statements is false? A promoted interest is ownership awarded the sponsor or promoter after a business venture achieves the equity investors' hurdle rate. An equity kicker is the percentage of the profit on sale awarded the sponsor or promoter of the deal after the equity investors receive the return of their initial investment. Debt service coverage rate is measured as the debt service divided by cash flow. The valuation method preferred by most appraisers, buyers, and sellers is the income approach, because it takes into consideration the future income potential of the project. QUESTION 20 Which of the following statements is false? The interest rate is the percentage of the loan balance the lender charges the borrower for the use of the money. During sensitivity analysis, any changes to the assumptions will change the project's PV, NPV, and IRR. In a loan amortization schedule, the debt service payment remains fixed over the amortization period. The amortization rate is the amount paid as regular fixed payments to the bank in repayment of the loan. QUESTION 1 Which of the following statements is true? A personal guarantee is a smart way for a borrower to reduce the interest rate on a loan. An amortization rate is the rate that a fixed asset is depreciated over its useful life. To a banker, LTV stands for long-term value. Carried interest refers to ownership percentage the sponsor or promoter of a deal receives with no equity investment on his part