CHAPTER 11-Mortgages: Additional Concepts, Analysis, and Applications TRUE/FALSE. 1. Debt coverage ratio measures the degree to which the NOI from the property is expected to exceed the mortgage payment. 2. n making an investment decision. IRR analysis will lead to a different "gono-go" decision than NPV analysis 3. A gross lease is riskier for the lessor than a net lease MULTIPLE CHOICE 4. Which of the following is NOT one of the primarybenefits of investing in real estate income property? (A) Net Income-Dollars left over after collecting rent and paying expenses but before considering taxes and financing costs (c) Diversification--Reducing overall risk to hold many types of investments (D) Taxes-Preferential tax benefits mean taxable income is often less than before-tax cashflow (E) Business estate income properties tend to generate higher incomes when other investments are in decline 5. A property produces a first year of s100,000 which is expected to grow by 2% per year. lfthe property is expected to be sold in year NOI sale price based on a terminal capitalization rate of 10, what is the expected 9.5% applied to the eleventh year NOI? (A) $1,308,815 (B) $1,283,152 (C) $1,263,158 (D) $1,257,992