QUESTION 7 Which of the following statements is false? A carried interest is the ownership percentage the sponsor or promoter of the deal receives with no equity investment on his part. When investors perform a sensitivity analysis they typically change each key projection assumption by +20% and -20%. In an amortization schedule, the amount of the principal repayment component increases while the amount of the interest component decreases. The cost replacement approach to valuation places a value on the property based on the current value of the land, current cost to rebuild the physical structure, and the current cost to replace the existing furniture, fixtures, and equipment. QUESTION 8 Which of the following statements is false? The comparable sales approach values a hotel property based on recent comparable sales. The income approach estimates the future stream of cash flow, minus an assumed sale at the end of the analysis period, and discounts the resulting cash flow using WACC. The IRR approach to valuation estimates the current market value of a property by calculating the percentage yield of the projected future cash flows, given the investment cost. MAI stands for member of the appraisal institute. QUESTION 1 1 Which investment tool do sophisticated investors use to allocate capital? historical analysis of net operating income the current ratio of the company inventory turnover internal rate of return