HRTM 421 Final Exam (Passed!)

principal correct answers amount of money borrowed debt service correct answers the amount of the regular fixed payments to the bank in repayment of the loan interest rate correct answers the percentage of the loan balance the lender charges the borrower for the use of money amortization rate correct answers the number of years the debt service payment is based on loan-to-value ratio correct answers the percentage of a venture's estimated value for which a lender will approve a loan loan-to-cost ratio correct answers same as the loan-to-value ratio with the cost of the project substituted for value in the calculation debt service coverage rate correct answers cash flow divided by debt service carried interest correct answers ownership percentage the sponsor or promoter of a deal receives with no equity investment on his part promoted interest correct answers ownership awarded to the sponsor or promoter after the business venture achieves the equity investors hurdle rate (ROI) equity kicker correct answers percentage of profit on sale awarded the sponsor or promoter of the deal after the equity investors receive the return on their initial investment sensitivity analysis correct answers method of analyzing investment opportunities by conservatively altering the assumptions on which the projections are based MAI correct answers member of the appraisal institute cost replacement approach correct answers a way to estimate the value of a hotel property based on the cost to replace the property in its current state comparable sales approach correct answers a way to estimate the value of a hotel based on recent sale prices of comparable properties income approach correct answers a way to estimate the current market value of a property by discounting projected future cash flows including the estimated sale price of the property at the end of the analysis period IRR approach correct answers a way to estimate the current market value of a property by calculating the percentage yield of the projected future cash flows, given the investment cost