True or False 1.Cap rate is defined as today's net operating income (NOI) divided by today's valuation of the property. 2. A property with a higher cap rate is always a better investment than a property with a lower cap rate. 3. Ann buys a small office building and pays for it cash with her own savings. Her return on equity (ROE) in the first year is equal to the building's cap rate at purchase. 4. Asset value = monthly debt payments + equity 5. Occupancy Rate = 100% - Vacancy Rate
True or False 1.Cap rate is defined as today's net operating income (NOI) divided by today's valuation of the property. 2. A property with a higher cap rate is always a better investment than a property with a lower cap rate. 3. Ann buys a small office building and pays for it cash with her own savings. Her return on equity (ROE) in the first year is equal to the building's cap rate at purchase. 4. Asset value = monthly debt payments + equity 5. Occupancy Rate = 100% - Vacancy Rate
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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F1.
True or False
1.Cap rate is defined as today's net operating income (NOI) divided by today's valuation of the property.
2. A property with a higher cap rate is always a better investment than a property with a lower cap rate.
3. Ann buys a small office building and pays for it cash with her own savings. Her
4. Asset value = monthly debt payments + equity
5. Occupancy Rate = 100% - Vacancy Rate
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