【正文】 erty Taxes 3,727 Depreciation $ 9,194 Interest Expense 18,388 Taxes as a % 32% Payment toward Principal 4,597 Question ID: 10894 What is the operating ine (NOI) of this property? A. $220,118. B. $233,856. C. $213,102. D. $226,840. C 226,840 13,735 = 213,102 25 Question ID: 10894 What are the earnings before interest and taxes (EBIT) of the building? A. $190,117. B. $185,520. C. $217,646. D. $203,908. D 213,102 9,194 = 203,908 Question ID: 10894 What are the earnings before taxes (EBT)? A. $190,117. B. $144,542. C. $185,520. D. $194,714. C 204,908 18,388 = 185,520 Question ID: 10894 What is the building39。s return on her investment? A. 50%. B. 75%. C. 85%. D. 65%. C $ 3400 / $ 4000 = 85% Question ID: 10899 Larry Everson will invest $60,000 in a property. He expects after tax cash flows of: $6,000 at the end of year 1。s returns. D Question ID: 10888 Equity real estate investment trusts are called such since they: A. must invest at least 35% of their portfolio in equities. B. must retain all ine for future reinvestment. C. invest in properties. D. have a near perfect correlation with the equities (stock) market. C Setup Text: Monthly Rent Revenue $ 857 Units 19 Vacancy and collection losses % Annual operating expenses: Management Fee $ 2,087 Utilities 2,331 Trash Collection 1,880 Repairs and Maintenance 2,148 Promotion and Advertising 884 Property Insurance 1,043 Property Taxes 5,205 17 Depreciation $ 9,281 Interest Expense 18,561 Taxes as a % 41% Payment toward Principal $ 4,640 Question ID: 10892 What is the Net Operating Ine (NOI) of this property? A. $160,278. B. $175,856. C. $195,396. D. $179,818. A 857 x 19 x 12 = 195,396 potential yearly gross rental ine = 19,5396 (.10)(195,396) 15,578 = 19,5396 19, 15,578 = 160,278 Question ID: 10892 What are the Earnings Before Interest and Taxes (EBIT) of the building? A. $1665,576. B. $137,077. C. $132,437. D. $150,997. D 160,278 9,281(depreciation) = 150,997 Question ID: 10892 18 What are the Earnings before Taxes (EBT)? A. $137,077. B. $141,717. C. $132,436. D. $96,699. C 150,997 18,561(interest exp) = 132,436 Question ID: 10892 What is the building39。s returns. C. increases the taxable ine of the investor and reduces the investment39。s expectations, this investment will need a operating ine (NOI) of: A. $31,500. B. $33,000. C. $38,500. D. $35,000. D 15 NOI = MKT VALUE x MKT CAP RATE. Question ID: 10883 Which of the following is CORRECT? Tax law enable real estate investors to: A. not deduct a portion of the original cost of the building each year and deduct the cost of the land. B. deduct a portion of the original cost of the building each year and deduct the cost of the land. C. not deduct a portion of the original cost of the building each year and not deduct the cost of the land. D. deduct a portion of the original cost of the building each year and not deduct the cost of the land. D Question ID: 10891 A real estate investment trust that invests in apartment buildings and shopping centers is called an: A. ine trust. B. construction trust. C. equity trust. D. appreciating trust. C Question ID: 10886 Which of the following is CORRECT? Depreciation cost: A. reduces the taxable ine of the investor and reduces the investment39。s initial asking price of $350,000. Latham39。s economic base. B Question ID: 10816 Longterm petition in real estate is a function of the: A. inventory of properties available. B. property location. C. availability of mortgage financing. D. buyer39。s psychographics. B. number of similar assets in the munity. C. munity39。 1 17: Asset Valuation: Alternative Investments 1: Real Estate and Other Tangible Investments Question ID: 10804 Which of the following is NOT included in establishing real estate objectives? A. Determining the skills needed to maintain and control the property. B. Setting financial goals and constraints. C. Determining the efficient frontier. D. Understanding the unique features of real estate characteristics. C Question ID: 10808 Speculative properties are those that: A. Seek appreciation in the value of the real estate. B. Possess a beta greater than one. C. Are considered high risk and possess a beta greater than one. D. Are considered high risk. A Question ID: 10805 The two major categories of real estate include: A. residential and apartment dwellings. B. residential and mercial. C. mercial and speculative. 2 D. single family and multifamily dwellings. B Question ID: 10815 Physical property inspections can reveal: A. problems with site defects. B. problems with encumbrances. C. problems with easements. D. all of the answers are correct. A Question ID: 10809 Demand for real estate is a function of all of the following factors EXCEPT: A. Population characteristics. B. The terms and conditions of mortgage financing. C. Competitive properties. D. The market area39。s economic base. C Question ID: 10813 Real estate investors obtain legal inspections to ensure: A. proper title to the property rights. B. the property will have a positive present value. 3 C. that the property will have a positive present value and proper title to the property rights. D. the proper allocation of real estate to the asset allocation process. A Question ID: 10818 Which of the following statements about the demand for property is FALSE? The demand for a property is a function of the: