Question: Why does our financial model include two inputs for cap rate market cap rate and test cap rate? Select ALL that apply. -The test cap

Why does our financial model include two inputs for cap rate market cap rate and test cap rate? Select ALL that apply.

-The test cap rate is usually set slightly higher than the market cap rate to show us a more conservative scenario when evaluating the property.

-Macroeconomic conditions and market factors can cause cap rate compression. The test cap rate sensitizes for these factors, allowing us to see a valuation under normal conditions.

-Having two inputs for market cap rate and test cap rate allows us to show the client how much better the banks rate is compared to the market cap rate.

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