CCIM 101 EXAM ACTUAL QUESTIONS AND
CORRECT ANSWERS WITH RATIONALE
LATEST UPDATE ALREADY GRADED A+
ASSURED PASS
SECTION 1: TIME VALUE OF MONEY (TVM)
(Questions 1–50)
1. An investor can purchase a small retail building for $1,200,000 today and
forecasts selling it in five years for $1,500,000 with no interim cash flows. What is
the annualized IRR?
A) 3.78%
B) 4.56%
C) 5.00%
D) 6.25%
Answer: B) 4.56%
Rationale: Solving for I/YR with PV = -1,200,000, FV = 1,500,000, N = 5, PMT =
0 yields approximately 4.56%. This represents the compound annual growth rate of
the investment.
2. What is the present value of $100,000 received five years from now if the
discount rate is 8%?
A) $68,058
B) $72,500
C) $75,000
D) $80,000
Answer: A) $68,058
Rationale: PV = FV / (1 + r)^n = 100,000 / (1.08)^5 = 100,.4693 = $68,058.
,3. An investor deposits $3,000 today into an account earning 5% interest
compounded annually. How much will the account be worth at the end of 30
years?
A) $10,500
B) $12,965
C) $15,000
D) $18,000
Answer: B) $12,965
Rationale: FV = PV × (1 + r)^n = 3,000 × (1.05)^30 = 3,000 × 4.3219 = $12,965.
4. What is the future value of an ordinary annuity of $10,000 per year for 10 years
at 6% interest?
A) $100,000
B) $131,808
C) $141,000
D) $150,000
Answer: B) $131,808
Rationale: FV of ordinary annuity = PMT × [((1 + r)^n - 1) / r] = 10,000 ×
[((1.06)^10 - 1) / 0.06] = 10,000 × 13.1808 = $131,808.
5. What is the present value of an ordinary annuity of $10,000 per year for 10 years
at 6% interest?
A) $73,601
B) $79,000
C) $85,000
D) $100,000
Answer: A) $73,601
Rationale: PV of ordinary annuity = PMT × [(1 - (1 + r)^-n) / r] = 10,000 × [(1 -
(1.06)^-10) / 0.06] = 10,000 × 7.3601 = $73,601.
6. What is the present value of an annuity due of $10,000 per year for 10 years at
6% interest?
A) $73,601
B) $78,017
C) $80,000
D) $85,000
,Answer: B) $78,017
Rationale: PV of annuity due = PV of ordinary annuity × (1 + r) = 73,601 × 1.06 =
$78,017. Payments at the beginning of each period are worth more.
7. Gingy is considering an investment that pays $35,000 next year. What is the
maximum amount Gingy should be willing to pay if the required return is 10%?
A) $28,500
B) $31,818
C) $35,000
D) $38,500
Answer: B) $31,818
Rationale: The maximum price is the present value of the future cash flow: PV =
35,000 / (1.10)^1 = $31,818.
8. Merlin has borrowed $75,000 using a loan that requires annual payments of
$10,100 over the next 10 years. What is the interest rate on this loan?
A) 5.0%
B) 5.5%
C) 6.0%
D) 6.5%
Answer: C) 6.0%
Rationale: Solving for I/YR with PV = 75,000, PMT = -10,100, N = 10, FV = 0
yields approximately 6.0%.
9. An investor wants to accumulate $500,000 in 15 years. If the account earns 7%
annually, how much must be deposited at the end of each year?
A) $18,500
B) $19,897
C) $22,000
D) $25,000
Answer: B) $19,897
Rationale: PMT = FV / [((1 + r)^n - 1) / r] = 500,000 / [((1.07)^15 - 1) / 0.07] =
500,.1290 = $19,897.
10. What is the present value of a perpetuity that pays $12,000 per year if the
discount rate is 8%?
A) $96,000
, B) $120,000
C) $150,000
D) $180,000
Answer: C) $150,000
Rationale: PV of perpetuity = PMT / r = 12,.08 = $150,000.
11. A property generates $50,000 in year 1, $55,000 in year 2, and $60,000 in year
3. What is the present value at a 10% discount rate?
A) $135,000
B) $136,251
C) $140,000
D) $150,000
Answer: B) $136,251
Rationale: PV = 50,000/1.10 + 55,000/1.10² + 60,000/1.10³ = 45,455 + 45,455 +
45,079 = $136,251 (rounded).
12. What is the net present value of an investment with an initial cost of $200,000
and cash flows of $80,000 per year for 3 years at a 10% discount rate?
A) -$1,052
B) $0
C) $1,052
D) $5,000
Answer: A) -$1,052
Rationale: PV of cash flows = 80,000 × 2.4869 = $198,948. NPV = 198,948 -
200,000 = -$1,052.
13. What is the internal rate of return (IRR) for an investment costing $100,000
that returns $25,000 annually for 5 years?
A) 5.00%
B) 7.93%
C) 8.50%
D) 10.00%
Answer: B) 7.93%
Rationale: Solving for I/YR with PV = 100,000, PMT = -25,000, N = 5, FV = 0
yields approximately 7.93%.
CORRECT ANSWERS WITH RATIONALE
LATEST UPDATE ALREADY GRADED A+
ASSURED PASS
SECTION 1: TIME VALUE OF MONEY (TVM)
(Questions 1–50)
1. An investor can purchase a small retail building for $1,200,000 today and
forecasts selling it in five years for $1,500,000 with no interim cash flows. What is
the annualized IRR?
A) 3.78%
B) 4.56%
C) 5.00%
D) 6.25%
Answer: B) 4.56%
Rationale: Solving for I/YR with PV = -1,200,000, FV = 1,500,000, N = 5, PMT =
0 yields approximately 4.56%. This represents the compound annual growth rate of
the investment.
2. What is the present value of $100,000 received five years from now if the
discount rate is 8%?
A) $68,058
B) $72,500
C) $75,000
D) $80,000
Answer: A) $68,058
Rationale: PV = FV / (1 + r)^n = 100,000 / (1.08)^5 = 100,.4693 = $68,058.
,3. An investor deposits $3,000 today into an account earning 5% interest
compounded annually. How much will the account be worth at the end of 30
years?
A) $10,500
B) $12,965
C) $15,000
D) $18,000
Answer: B) $12,965
Rationale: FV = PV × (1 + r)^n = 3,000 × (1.05)^30 = 3,000 × 4.3219 = $12,965.
4. What is the future value of an ordinary annuity of $10,000 per year for 10 years
at 6% interest?
A) $100,000
B) $131,808
C) $141,000
D) $150,000
Answer: B) $131,808
Rationale: FV of ordinary annuity = PMT × [((1 + r)^n - 1) / r] = 10,000 ×
[((1.06)^10 - 1) / 0.06] = 10,000 × 13.1808 = $131,808.
5. What is the present value of an ordinary annuity of $10,000 per year for 10 years
at 6% interest?
A) $73,601
B) $79,000
C) $85,000
D) $100,000
Answer: A) $73,601
Rationale: PV of ordinary annuity = PMT × [(1 - (1 + r)^-n) / r] = 10,000 × [(1 -
(1.06)^-10) / 0.06] = 10,000 × 7.3601 = $73,601.
6. What is the present value of an annuity due of $10,000 per year for 10 years at
6% interest?
A) $73,601
B) $78,017
C) $80,000
D) $85,000
,Answer: B) $78,017
Rationale: PV of annuity due = PV of ordinary annuity × (1 + r) = 73,601 × 1.06 =
$78,017. Payments at the beginning of each period are worth more.
7. Gingy is considering an investment that pays $35,000 next year. What is the
maximum amount Gingy should be willing to pay if the required return is 10%?
A) $28,500
B) $31,818
C) $35,000
D) $38,500
Answer: B) $31,818
Rationale: The maximum price is the present value of the future cash flow: PV =
35,000 / (1.10)^1 = $31,818.
8. Merlin has borrowed $75,000 using a loan that requires annual payments of
$10,100 over the next 10 years. What is the interest rate on this loan?
A) 5.0%
B) 5.5%
C) 6.0%
D) 6.5%
Answer: C) 6.0%
Rationale: Solving for I/YR with PV = 75,000, PMT = -10,100, N = 10, FV = 0
yields approximately 6.0%.
9. An investor wants to accumulate $500,000 in 15 years. If the account earns 7%
annually, how much must be deposited at the end of each year?
A) $18,500
B) $19,897
C) $22,000
D) $25,000
Answer: B) $19,897
Rationale: PMT = FV / [((1 + r)^n - 1) / r] = 500,000 / [((1.07)^15 - 1) / 0.07] =
500,.1290 = $19,897.
10. What is the present value of a perpetuity that pays $12,000 per year if the
discount rate is 8%?
A) $96,000
, B) $120,000
C) $150,000
D) $180,000
Answer: C) $150,000
Rationale: PV of perpetuity = PMT / r = 12,.08 = $150,000.
11. A property generates $50,000 in year 1, $55,000 in year 2, and $60,000 in year
3. What is the present value at a 10% discount rate?
A) $135,000
B) $136,251
C) $140,000
D) $150,000
Answer: B) $136,251
Rationale: PV = 50,000/1.10 + 55,000/1.10² + 60,000/1.10³ = 45,455 + 45,455 +
45,079 = $136,251 (rounded).
12. What is the net present value of an investment with an initial cost of $200,000
and cash flows of $80,000 per year for 3 years at a 10% discount rate?
A) -$1,052
B) $0
C) $1,052
D) $5,000
Answer: A) -$1,052
Rationale: PV of cash flows = 80,000 × 2.4869 = $198,948. NPV = 198,948 -
200,000 = -$1,052.
13. What is the internal rate of return (IRR) for an investment costing $100,000
that returns $25,000 annually for 5 years?
A) 5.00%
B) 7.93%
C) 8.50%
D) 10.00%
Answer: B) 7.93%
Rationale: Solving for I/YR with PV = 100,000, PMT = -25,000, N = 5, FV = 0
yields approximately 7.93%.
