Reference no: EM133017046

Questions-

Q1. An investor is considering buying an existing mortgage that has 15 annual payments of $75,000 remaining to maturity. What could the investor pay for this mortgage and hold it to maturity to earn 12% on the investment? (Please round to the nearest dollar.)

A. $1,125,000

B. $1,039,879

C. $1,044,287

D. $510,815

Q2. The first step in Discount Cash Flow Analysis is:

A. Determine the number of compound/discount periods per year

B. Calculate the net present value

C. Place the cash flow model amounts and their timing into a T-bar

D. Calculate the internal rate of return

Q3. The value of an investment will decrease when?

A. The required yield decreases.

B. The required yield increases.

C. The present value decreases.

D. The required yield remains the same.

Q4. An investment requires a $30,000 initial investment and produces cash flows of $0 EOY1, ($5,000) EOY 2; and $50,000 EOY 3. The investor has a target yield of 9 percent. What is the NPV of this investment?

A. $1,043

B. ($1,043)

C. $3,331

D. $4,401

Q5. The anticipated holding period for an investment is usually determined by?

A. The investors' objectives

B. The amount of the initial investment

C. The operating expenses annual growth rate

D. The acquisitions costs

Q6. Comparing an apartment building to an office building, the total gain on the sale, the cost-recovery deductions, and the capital gains tax from appreciation:

A. Comparing an apartment building to an office building, the total gain on the sale, the cost-recovery deductions, and the capital gains tax from appreciation:

B. Would be more, would be more, and would be the same, respectively

C. Would be less, would be less, and would be the same, respectively

D. None of the above