BUSI 422 Read & Interact Brueggeman & Fisher Chapter 10 solutions complete answers

BUSI 422 Read & Interact Brueggeman & Fisher Chapter 10 solutions complete answers

 

The cost approach to valuing properties values the cost of _______ and the value of ______ separately.

 

With the cost approach, the estimate of value is affected by ________

 

Property values will change in what direction when excess supply is expected?

 

Excess supply causes present values to _______.

 

Comparable property values ______ when cap rates go up.

 

The effects of interest rates on value __________.

 

The _________ is an estimated value that takes into account the requirements of the mortgage lender and the equity investor.

 

Given the implied land value for the following property types, which property should you build?Office: $750,000Retail: $1,800,000Apartment: $1,100,000Warehouse: $900,000

 

Excess demand causes cap rates to:

 

Given the implied land value for the following property types, which property should you build?Office: $750,000Retail: $1,100,000Apartment: $1,800,000Warehouse: $900,000

 

A key input to calculating the discount rate is the _____.

 

Properties that are comparable are _________

 

To calculate the present value of an investment, one needs _______.

 

The capitalization method of valuation can not assure a property will be a good  .

 

The GIM is used in conjunction with the _____.

 

Which of the following determines values based on comparable properties recently sold?

 

Effective gross income is ________.

 

The most probable price a property would sell for is referred to as which of the following?

 

Which methods of valuation focus on adjusting for physical and locational differences of comparable properties?

 

The __________ to property valuation is based on the principle that the value of a property is related to its cash flow.

 

The        value is the most probably price a property would sell for in a competitive market.

 

True or false: The decision to lend does not depend on a property’s market value.

 

Which parties use appraisals in real estate finance decision making?

 

       reports are required by lenders.

 

When purchasing a leased fee estate, the comparable property for valuation should have which similar characteristics?

 

Order (from earliest to latest) the following parts of the appraisal process:

 

Which methods of valuation focus on the income producing aspect of comparable properties?

 

An appraisal is an        of value.

 

An alternative method to estimating the terminal cap rate is to estimate the        value.

 

Under the discounted cash flow method of valuation, investors will pay no more than the        value of all future cash flows.

 

Excess supply causes cap rates to:

 

Residual land value is defined as:

 

Oversupply and falling interest rates have what effect on cap rates?

 

True or false: The capitalization rate method of valuation guarantees a property will be a good investment.

 

The cost approach is less desirable in what situation(s)?

 

Rank the following investments from most risk to least risk:

 

Which of the following are methods to compute gross income?

 

Which of the following determines values based on comparable properties recently old?

 

An        is an estimate of value.

 

The capitalization method of valuation cannot assure a property will be a good       .

 

Estimating the resale value is an alternative to using the        cap rate.

 

When long-run growth in NOI is expected to be positive, the terminal cap rate should be:

 

Which of the following are examples of different units of comparison?

 

What must be estimated under the discounted cash flow method of property valuation?

 

True or false: When purchasing properties with existing leases, the comparable property should have a similar lease.

 

When analyzing real market forces and interest rates, it is important to analyze the        amongst the real market forces.

 

The sales comparison approach uses which of the following to value a property?

 

Excess demand and falling interest rates have what effect on cap rates?

 

The discount rate is the required return based on the        of the investment.

 

A property that is very         in quality, size, age, and location would make a good comparable property.

 

Oversupply and rising interest rates have what effect on cap rates?

 

Excess demand causes present value to:

 

If a property has effective gross income of $50,000 and a gross income multiplier of 5.5, the value would be:

 

Changes in expected NOI cause        in land prices.

 

When long-run growth in NOI is expected to be level or zero, the terminal cap rate should be:

 

An informed investor would never pay        for a property than what recent comparable properties have sold for.

 

Changes in expected growth rates cause volatility in      prices.

 

When interest rates rise, cap rates will:

 

The mortgage-equity capitalization method says the property value is equal to the expected mortgage financing plus what?

 

When purchasing a property with a lease already in existence, the buyer is purchasing which type of estate?

 

The gross income multiplier is defined as:

 

Due to age and depreciation, older properties will produce         income as a new property.

 

The principle that the value of a property is related to its ability to produce cash flow defines what valuation approach?

 

Any cash flows beyond projections will be represented by:

 

One method of valuation is that the value of a property is equal to:

 

Market value is used in the appraisal process because it can:

 

Given the implied land value for the following property types, which property should you build?

 

The cost approach to valuing properties values the cost of        and the value of        separately.

 

The rate of return required by an equity investor should be         the return of the entire property.