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The use of debit in income-producing real estate can alter the
value of:
a. amount risk of the cash flow to bankers
b. amount of cash flows to equity investors
c. risk of cash flows to equity investors
d. b and c
e. a and b - ANS>> D
Tax Shelters - ANS>> A tax shelter is an investment whose value
is enhanced by tax rules and regulations.
A key non-real estate source of property cash flow is:
a. tax shelter
b. managerial talent
c. use of equity financing
d. debt financing
e. all the above - ANS>> B
, The following is a NOT a proper list of potential commercial
properties:
a. hotels, motels, urban office buildings
b. suburban office buildings, shopping malls, strip centers
c. warehouses, mini-warehouses, theme parks
d. restaurants, fast-food facilities, nursing centers
e. hospitals, apartment complexes, casinos, public schools -
ANS>> E
Financial leverage is:
a. the left side of the balance sheet
b. the use of debt to finance real estate
c. the use of equity to finance real estate
d. a and b
e. b and c - ANS>> B
Investors purchase multiple properties to:
a. diversify a portfolio
b. maximize investment return
c. minimize risk
d. a and b
e. all of the above - ANS>> E
Positive leverage is defined as the use of debt at a cost
________________ than the return on the asset which