1. If market pricing of commercial real estate is above replacement cost, ignoring risk, to ensure a favorable cost basis an investor would: C a. Renovate existing properties IF Yr. 1 entry cap rates based upon post-renovation NOI were less than market cap rates at that time C b. Renovate existing properties IF Yr. 1 entry cap rates based upon post-renovation NOI were greater than market cap rates at that time c. None of the answer choices c d. Purchase existing properties

1. If market pricing of commercial real estate is above replacement cost, ignoring risk, to ensure a favorable cost basis an investor would: C a. Renovate existing properties IF Yr. 1 entry cap rates based upon post-renovation NOI were less than market cap rates at that time C b. Renovate existing properties IF Yr. 1 entry cap rates based upon post-renovation NOI were greater than market cap rates at that time c. None of the answer choices c d. Purchase existing properties

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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5. I need help with multiple choice finance home work question If a project has a NPV of zero, the project: Has a discounted payback period that is shorter than the life of the project. Has a profitability index that is greater than one. Should be accepted even if the firm has alternative investments with a positive NPV. Should be rejected. Is expected to earn a return equal to the firm's required return.
If investors buy properties based on expected future benefits, what is the rationale for appraising property based on current cap rates without making any income or resale price projections?
All of the following are determinants of cap rates in the property asset market, except: Select one: a. Comparative yields in the capital market. b. The risk perceived for the property (as determined in the space and capital market). c. The net operating income divided by the property price. d. The expected growth in property rents (as determined in the space market). e. The risk-free rate.
Possible outcomes for three investment alternatives and their probabilities of occurrence are given next. Failure Acceptable Successful Alternative 1 Alternative 2 Alternative 3 Outcomes Probability Outcomes Probability Outcomes Probability 50 0.40 70 0.20 85 0.40 0.20 130 0.40 325 0.40 0.40 265 0.40 410 0.20 Alternative 1 Alternative 2 Alternative 3 80 135 Using the coefficient of variation, rank the three alternatives in terms of risk from lowest to highest. Note: Do not round intermediate calculations. Round your answers to 3 decimal places. Coefficient of Variation Rank
An option to buy the asset is referred to as a _______, while an asset to sell the asset is called a _______. Group of answer choices B. Put, Call D. Call, Short A. Short, Put C. Call, Put
Select all that are true with respect to the NPV rule for making capital investment decisions. Group of answer choices When done correctly, NPV directly measures expected value creation NPV ignores cash flows in the distant future NPV causes decision makers to be myopic For independent projects, all positive NPV projects should be taken, and negative NPV projects should not be taken For mutually exclusive projects, choose the project with the highest NPV
Which of the following classes of real estate investment has the highest risk level? Opportunity Core Plus Value Added Core
Hello can you show how this was done, i cant figure out the isolation of P was done. the first is the task and the second has the solution also, but i cant figure out how it was done P = 6.06%
The terminal cap rate used for valuation purposes in a DCF is fundamentally different than the discount rate used in that same DCF. The assumed sale of the property takes place at the end of your hold period, generally 10 years later in most models. The property is older and the market and the economy have changed. With that said, what do you believe to be the right approach for terminal cap rate selection in a DCF on a development project and why?
please explain why the option is correct and remaining incorrect in detail describe each and every option
What does Highest and Best Use consist of? Group of answer choices: (1) legally permissible (2) physically possible (3) return on investment (4) maximally productive (1) legally permissible (2) physically possible (3) financially feasible (4) maximally productive (1) legally permissible (2) physically pleasing (3) financially feasible (4) maximally productive (1) legally permissible (2) physically possible (3) financially feasible (4) maximum income production
1. What are three significant differences between income property finance and owner occupied single family residential finance 2. You are considering a loan or investment in an income property. The projected DSCR is too low relative to like properties. What does that potentially tell you? 3. You are considering a loan or investment in an income property. The market Cap Rate is significantly higher than suggested by current NOI on the subject property relative to the asking price. Discuss the implications and potential causes,

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