Purchase Solution

Real estate finance questions

Not what you're looking for?

Ask Custom Question

1 A landlord can shift risk to tenants through the use of:
(A) tax stops
(B) escalator clauses
(C) net leases
(D) all of the above

2 In real estate investment analysis, capitalization rates:
(A) are a measure of the relationship between a property's market value and net operating income
(B) are used primarily as an income forecasting tool
(C) are a measure of the relationship between a property's market value and gross rental income
(D) none of the above are true

3. Depreciation allowances affect:
(A) income tax consequences
(B) net operating income
(C) before-tax cash flow
(D) all of the above

4. A real estate investment is available at an initial cash outlay of $10,000 and is expected to yield cash flows of $3,343.81 per year for five years. The internal rate of return is approximately:
(A) 2%
(B) 20%
(C) 23%
(D) 17%

5.The revenue a property is expected to generate after adjusting for operating expenses but before providing for debt service or income tax consequences is:
(A) net operating income
(B) effective gross income
(C) normalized gross income
(D) before-tax cash flow

Purchase this Solution

Solution Summary

This solution discusses several important real estate finance concepts.

Solution Preview

1. D. A tax stop can require the tenant to reimburse the landlord if the property taxes exceed a certain threshold, an escalator clause can require a tenant to pay more rent once the landlord's costs exceed a certain threshold, and a net lease requires the tenant to pay certain costs usually borne by the landlord.

2. A. This is the definition.

3. A. ...

Purchase this Solution

Free BrainMass Quizzes

This quiz will test your understanding of the SWOT analysis, including terms, concepts, uses, advantages, and process.

Situational Leadership

This quiz will help you better understand Situational Leadership and its theories.

Academic Reading and Writing: Critical Thinking

Importance of Critical Thinking

Accounting: Statement of Cash flows

This quiz tests your knowledge of the components of the statements of cash flows and the methods used to determine cash flows.

Understanding the Accounting Equation

These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.