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1.A method of estimating property value by discounting on expected future cash flows to a present value by a rate typical for investors in the marketplace for the interest being valued. The approach may or may not explicitly include financing Select the correct response Annuity capitalization Allocation Residual capitalization Extraction Yield capitalization

1.A method of estimating property value by discounting on expected future cash flows to a present value by a rate typical for investors in the marketplace for the interest being valued. The approach may or may not explicitly include financing Select the correct response Annuity capitalization Allocation Residual capitalization Extraction Yield capitalization

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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1.A method of estimating property value by discounting on expected future cash flows to a present value by a rate typical for investors in the marketplace for the interest being valued. The approach may or may not explicitly include financing Select the correct response Annuity capitalization Allocation Residual capitalization Extraction Yield capitalization 2.The process of converting future income top a present value by mathematically reducing future cash flow by the implied interest that would have been earned assuming an initial investment, an interest rate and a specified period (possibly divided into shorter equal periodic increments). Select the correct response Discounting Compounding Annuity Amortized 3.The ratio of the total amount of the loan divided by the invested capital (equity ) of the owner(s) Select the correct response Liability-equity ratio Debt-equity ratio NPV Assets-equity ratio 4. A ratio that expresses the link between a year's cash flow and the present value of the cash flow or the rate of interest on the cash flow. Select the correct response: Recapture rate Mortgage ratio Capitalization rate Interest rate Effective rate 5. Any method of transforming income into a value estimate. Select the correct response Capitalization Overall rate Recapture rate Residual capitalization Yield capitalization 7.Profit or loss on a recurring basis resulting from the operation and ultimate disposal of an income producing asset Further, it might be classed as either before-tax or after-tax cash flow, and it could also include the impact of borrowing Select the correct response Cash flow Accounting flow Students Market flow Economic flow My Classes Cash flow series of applications
Transcribed Image Text:1.A method of estimating property value by discounting on expected future cash flows to a present value by a rate typical for investors in the marketplace for the interest being valued. The approach may or may not explicitly include financing Select the correct response Annuity capitalization Allocation Residual capitalization Extraction Yield capitalization 2.The process of converting future income top a present value by mathematically reducing future cash flow by the implied interest that would have been earned assuming an initial investment, an interest rate and a specified period (possibly divided into shorter equal periodic increments). Select the correct response Discounting Compounding Annuity Amortized 3.The ratio of the total amount of the loan divided by the invested capital (equity ) of the owner(s) Select the correct response Liability-equity ratio Debt-equity ratio NPV Assets-equity ratio 4. A ratio that expresses the link between a year's cash flow and the present value of the cash flow or the rate of interest on the cash flow. Select the correct response: Recapture rate Mortgage ratio Capitalization rate Interest rate Effective rate 5. Any method of transforming income into a value estimate. Select the correct response Capitalization Overall rate Recapture rate Residual capitalization Yield capitalization 7.Profit or loss on a recurring basis resulting from the operation and ultimate disposal of an income producing asset Further, it might be classed as either before-tax or after-tax cash flow, and it could also include the impact of borrowing Select the correct response Cash flow Accounting flow Students Market flow Economic flow My Classes Cash flow series of applications
8.Any method whereby the analyst prepares a cash flow forecast ( including income from operations and resale), selects a discount rate that reflects the return expected for the interest and uses the rate to calculate the present value of each of the cash flows. The total present value of the cash becomes the value estimate for that interest. Sometimes the cash flow forecast is based on an assumed pattern of change, e.g., compound growth Select the correct response NPV Cash flow analysis IRR Discounted cash flow analysis Reversion 10.The terms of financing, whether good or bad, Select the correct response Have no effect on the market value Should be ignored when adjusting comparables Depend on fiscal and monetary policy Have no effect on the market price Have no effect on affordability 11.Whenever two or more alternative uses need the same initial capital investment, the usage that maximizes the investments a long period of time is considered to be the best and highest use Select the correct response Diversified portfolio Potential gross income Operating expenses Occupancy rate Net operating income 16.When determining an overall capitalization rate for an income producing property, you will take into account all of the factors listed below except Select the correct response: return of invested capital risk factors return on invested capital the interest rate on the existing loan, which was arranged last year 20. A basement laundry facility in a high-rise, 100-unit apartment building generates P100 per month in revenue from a concessionaire, according to the building manager. The laundry income is Select the correct response: added to before-tax cash flow included, as miscellaneous income, in potential gross income deducted from effective gross income distributed to the maintenance workers included, as other income, in effective gross income 27.ls a factor derived from comparable properties and applied to expected rental income in order to estimate a value. It may be used in finding the value of a property. It is the ratio that expresses the relation between gross income and sales prices of a property, Select the correct response Scrap Value Multiplier Effect Factor Market Value Gross Income Multiplier Zonal Value
Transcribed Image Text:8.Any method whereby the analyst prepares a cash flow forecast ( including income from operations and resale), selects a discount rate that reflects the return expected for the interest and uses the rate to calculate the present value of each of the cash flows. The total present value of the cash becomes the value estimate for that interest. Sometimes the cash flow forecast is based on an assumed pattern of change, e.g., compound growth Select the correct response NPV Cash flow analysis IRR Discounted cash flow analysis Reversion 10.The terms of financing, whether good or bad, Select the correct response Have no effect on the market value Should be ignored when adjusting comparables Depend on fiscal and monetary policy Have no effect on the market price Have no effect on affordability 11.Whenever two or more alternative uses need the same initial capital investment, the usage that maximizes the investments a long period of time is considered to be the best and highest use Select the correct response Diversified portfolio Potential gross income Operating expenses Occupancy rate Net operating income 16.When determining an overall capitalization rate for an income producing property, you will take into account all of the factors listed below except Select the correct response: return of invested capital risk factors return on invested capital the interest rate on the existing loan, which was arranged last year 20. A basement laundry facility in a high-rise, 100-unit apartment building generates P100 per month in revenue from a concessionaire, according to the building manager. The laundry income is Select the correct response: added to before-tax cash flow included, as miscellaneous income, in potential gross income deducted from effective gross income distributed to the maintenance workers included, as other income, in effective gross income 27.ls a factor derived from comparable properties and applied to expected rental income in order to estimate a value. It may be used in finding the value of a property. It is the ratio that expresses the relation between gross income and sales prices of a property, Select the correct response Scrap Value Multiplier Effect Factor Market Value Gross Income Multiplier Zonal Value
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