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What is the likely selling price for transaction

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Reference no: EM133204753

1.If buyers and sellers are able to get deals only where NPV = 0, it is still worth investing in real estate.

A True

B False

2.In a property transaction, a buyer's calculated investment value is $3,500,000, while the seller's calculated investment value is $2,000,000. What is the likely selling price for this transaction?

A Between $2,000,000 and $3,500,000

B Exactly $1,500,000

C Between $1,500,000 and $3,500,000

D Between $1,500,000 and $2,000,000

3.A property has a McDonald's restaurant on it, which can earn $50,000 per year. In any other use (including another brand of restaurant), the most it can earn is $40,000 per year. Assuming a discount rate of 10% and constant cash flow in perpetuity, what is the "investment value" of this property to McDonald's, and what is its "market value"?

A Both investment value and market value are $400,000.

B Both investment value and market value are $500,000.

C Investment value is $400,000 and market value is $500,000.

D Investment value is $500,000 and market value is $400,000.

Reference no: EM133204753

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