Question: 10.Data for five comparable income properties that sold recently are shown below: Property NOI Sale Price A $ 57,800 $ 566,600 B 49,200 496,900 C
10.Data for five comparable income properties that sold recently are shown below:
Property
NOI
Sale Price
A
$ 57,800
$ 566,600
B
49,200
496,900
C
63,000
630,000
D
56,000
538,500
E
58,500
600,000
What is the indicated overall rate (RO)?
- A.
10.05
- B.
13.05
- C.
11.05
- D.
14.05
11.In which way is the discounted cash flow valuation method similar to the direct capitalization method of valuation?
- A.a holding period must be determined for eac
- B.a required internal rate of return must be estimated
- C.Both can be used on commercial property
- D.net income projections must be made for each year
12.Using the following information, determine the net operating incomeNOI.
Subject Property
Number of apartments
15
Market rentper month.
1000
Vacancy and collection losses
10% of PGI
Operating expenses
5% of EGI
Capital expenditures
10% of EGI
- A.
$137,700
- B.
$135,000
- C.
$162,000
- D.
$153,900
13. While there are several conventional approaches used to estimate the market value of real estate, which of the following is typically considered the most reliable approach especially for residential properties?
- A.cost approach
- B.income approach
- C.investment approach
- D.sales comparison approach
14.If a comparable property sells for $1,200,000 and the effective gross income of the property is $12,000 per month, the gross income multiplier is
- A.8.33
- B.5.99
- C.15.49
- D.7.00
15.Data for five comparable income properties that sold recently are shown in the accompanying table.The cap rate is:
Property
NOI
Sale Price
A
$70,000
$1,000,000
B
60,000
900,000
C
73,000
1,200,000
D
76,000
950,000
E
68,500
980,000
- A.
6.95%
- B.
1 8.33%
- C.
8.9%
- D.
15.33%
16.An office building is purchased with the following projected cash flows:
NOI is expected to be $130,000 in year 1 with 5 percent annual increases.
The purchase price of the property is $720,000.
100% equity financing is used to purchase the property
The property is sold at the end of year 4 for $860,000 with selling costs of 4 percent.
The required unlevered rate of return is 14 percent.
Calculate the unlevered internal rate of return (IRR) and NPV
Hint: Create a Multi-year proforma,then calculate NPV, IRR)
- A.
12.88%;-173,732
- B.
IRR=21.88% , NPV=173,732
- C.
13.88% ; -173,732
- D.
5.35% ; 173,732
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