Questions 12-16 pertain to the following scenario:

A property value is $4,000,000, and it has a $3,000,000 loan on it. The annual net operating income is $220,000.

12. What is the capitalization rate?

1. 5.00%
2. 5.25%
3. 5.50%
4. 5.75%

13. When its time to refinance, with an interest rate of 4.00% and a 30-year amortization schedule, what is the loan amount the borrower will be able to get based on a 1.25 minimum debt service coverage ratio?

1. $4,400,000
2. $3,000,000
3. $3,072,098
4. $3,071,553

14. When its time to refinance, assuming a future capitalization rate of 5.00%, with an interest rate of 4.00% and a 30-year amortization schedule, what is the loan amount the borrower will be able to get based on a 1.25 minimum debt service coverage ratio and a 75% maximum LTV?

1. $4,400,000
2. $3,000,000
3. $3,072,098
4. $3,071,553

15. Assuming the current interest rate is 3.75% and the amortization schedule is 25 years, the current annual debt service is approximately:

1. $185,100
2. $112,500
3. $150,000
4. $246,800

16. Assuming the current interest rate is 3.75% and the amortization schedule is 25 years, if the borrower invested $1,120,000 of cash equity (including closing costs), the borrowers cash on cash return is approximately:

1. 5.50%
2. 3.12%
3. 2.68%
4. 19.64%