QUESTION 7

	Year:
	0	1	2	3	4	5
ATCF from Operations:		6156	6601	7054	7514	7980
ATCF from Sales:	70979	75774	80962	86575	92648	99222
Assumed Reinvestment Rate		15.40%	15.40%	15.40%	15.40%	15.40%

Suppose you have a property, and it could be sold for $70979 today, but you plan to continue to hold it for another one to four years. The projection of cash flows for the next several years is reported in the table above. Solely based on this information, how many more years should you hold the property?

	a.	Three years
	b.	Two years
	c.	One year
	d.	Four years

Which of the following is NOT a benefit of refinancing?

	a.	It is an alternative to sale of the property
	b.	No taxes have to be paid on funds received by additional borrowing
	c.	The investor can increase financial leverage
	d.	Risk is decreased