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FINC 371 EXAM 4 Review Questions 100% Solved!! $12.49   Add to cart

Exam (elaborations)

FINC 371 EXAM 4 Review Questions 100% Solved!!

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  • Course
  • FINC 371
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  • FINC 371

Which of the following is not normally included as one of the advantages of real estate as an investment - ANSWERLiquididty Which of the following terms refers to the cash flow a real estate investor can put in his or her pocket at the end of the year - ANSWERATCF The deduction of tax depreci...

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  • August 5, 2024
  • 4
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • FINC 371
  • FINC 371
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papersbyjol
FINC 371 EXAM 4 Review Questions 100% Solved!!



Which of the following is not normally included as one of the advantages of real estate as an
investment - ANSWERLiquididty



Which of the following terms refers to the cash flow a real estate investor can put in his or her pocket
at the end of the year - ANSWERATCF



The deduction of tax depreciation from taxable income tends to _______ the capital gains upon sale
of the property - ANSWERincrease



Under the current tax law, residential real estate investments have a depreciable life of how many
years - ANSWER27.5



In a cash-flow projection, the net operating income is determined by starting with the gross potential
income, calculating the gross effective income, and then - ANSWERdeducting operating expenses



according to the net present value decision rule, an investor who is considering a project which has a
net present value of $1 - ANSWERaccept the investment



Negative leverage occurs when the return on equity of the project _________ with the use of
_________ - ANSWERincrease, debt




the investor's required rate of return is the same as the interest rate on available mortgage loans -
ANSWERfalse



financial leverage occurs from all cash purchases - ANSWERfalse



financial decision making is based on the concept of wealth maximization - ANSWERtrue



the internal rate of return is the interest rate for which a project's net present value (NPV) is exactly
equal to zero - ANSWERtrue

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