Question

1. Which of the following is not an acceptable approach to valuing commercial real estate?

(A) Sales Comparison (comparables)

(B) Discounted Cash Flow (DCF)

(C) Factor discounting rates

(D) Replacement Cost, land + structure

2. An effective tax rate:

(A) Takes into account the effects of depreciation

(B) Measures the difference between the Before Tax IRR and After-Tax IRR

(C) Can be less than the actual marginal tax rate

(D) All of the above

3. Which of the following is NOT true regarding fair market value?

(A) It’s an estimate of the market value of a property

(B) It’s an estimate of what a knowledgeable, willing and unpressured buyer would probably pay

(C) It may be based on precedent, extrapolation or comparables

(D) A sale by the lender of foreclosed real estate qualifies as a FMV transaction

(E) All of the above is correct

4)Which of the following is NOT true obtaining bank financing for a property?

(A) The interest expense is a tax shield and will lower the taxable income

(B) A higher LTV loan has greater risk and return potential and therefore will have a greater impact on IRR, Equity Multiple and ROE (return on equity) than a lower LTV loan

(C) When underwiring a loan banks, prefer higher, rather than lower, debt service coverage ratios and debt yield ratios

(D) Banks prefer to lend to construction projects (properties under development) since the property is better collateral and less risky than an older (stabilized) property

(E) All of the above is true

Answer 1

As HOMEWORKLIB RULES's policy I can answer only the 1st question. For answers of other question please post the questions separately :

Answer : .(C) Factor discounting rates

If you have any doubt then please ask

Please do rate the answer