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In what ways do you think information useful for investors (in assessing future cash flows) differs from that useful for creditors (in assessing default risk)?
Why is property development more vulnerable to business cycle risk than investment in existing property of similar type?
Explain the possible advantages of miniperm financing as opposed to traditional construction financing followed by "permanent" financing.
Compare the advantages of competitive bidding for a general contractor with negotiated cost plus fee. What is the argument for using a maximum cost with sharing of overruns or savings between devel
In selecting an architect, what must a developer consider about the architect besides design credentials and relevant experience?
On January 1, 2007 Charles Jamison borrows $40,000 from his father to open a business. What are the annual payments?
List at least five ways that a developer may attempt to reduce the risks of the permitting process.
Why is the permitting stage of development often the riskiest stage of the process?
You are considering the purchase of an apartment complex. The following assumptions are made:
On June 30 Heckle signed a bank loan for €400,000, bearing interest at 8% per year and paab1e in full on June 30, 2011. Prepare, in good format. Heckle's balance sheet as of June 30. 2008.
The before-tax cash flow from the sale of the property is expected to be $295,050. What is the net present value of this investment, assuming a 12 percent required rate of return on levered cash flo
If the before-tax equity reversion after four years equals $90,000, and an initial equity investment of $175,000 is required, what is the IRR on the project? If the required going-in levered rate of
At the time of purchase, the property is financed with a 75 percent loan-to-value ratio for 30 years at 8 percent (annual) with monthly amortization. At the end of year 4, the property is sold with
An analyst calculates an equity cost of capital for the firm of 7.9 percent using the capital asset pricing model (CAPM). 'What market risk premium is she assuming?
List three important ways in which DCF valuation models differ from direct capitalization models.
What is the basic shortcoming of most ratios and rules of thumb used in commercial real estate investment decision making?
Explain why income property cash flow is not the same as taxable income.
The rate of exchange in effect at December 31, 2011, was 5.9 LCU to $1. What rate of exchange should be used to translate the dividend for the December 31, 2011, financial statements?
What is the primary thing that distinguishes an operating expense from a capital expenditure?
What is the estimated Net Operating Income? Using the selling price, what is the implied first year overall capitalization rate? What is the (effective) gross income multiplier?
Why might a commercial real estate investor borrow to help finance an investment even if she could afford to pay 100 percent cash?
What is the overall capitalization rate? What is the effective gross income multiplier? What is the equity dividend rate (the before-tax return on equity)?
What is the estimated overall cap rate (Ro) using NOI for the first year of operations?
What is estimated effective gross income (EGI) for the first year of operations?
There may be some truth in these CAPM and APT theories, but last year some stocks did much better than these theories predicted, and other stocks did much worse?