Fin 467 final exam mcq solutions (a+ guaranteed)

 

There are total 40 questions. First 10 is shown here, the rest are in the attachment with solutions. Correct options are in red color.

 

1. How much would you pay for the right to receive $80 at the end of 10 years if you can earn 15 percent interest?

a. $19.15.

b. $19.77.

c. $38.48.

d. $38.82.

e. $70.65.

2. How much would you pay to receive $50 in one year and $60 in the second year if you can earn 15 percent interest?

a. $88.85.

b. $89.41.

c. $98.43.

d. $107.91.

e. $110.00.

3. What amount invested each year at 10 percent annually will grow to $10,000 at the end of five years?

a. $1,489.07.

b. $1,637.97.

c. $1,723.57.

d. $1,809.75.

e. $2,000.00

4.  What is the present value of $500 received at the end of each of the next three years and $1,000 received at the end of the fourth year, assuming a required rate of return of 15 percent?

a. $900.51.

b. $1,035.59.

c. $1,713.37.

d. $1,784.36.

e. $2,049.06.

5. Income multipliers:

a. Are useful as a preliminary analysis tool to weed out obviously unacceptable investment opportunities.

b. Are adequate as the sole indication of a property’s investment worth.

c. Relate the property’s price or value to aftertax cash flow.

d. None of the above.

6. The overall capitalization rate:

a. Is the reciprocal of the net income multiplier.

b. Incorporates the effect of mortgage financing.

c. Considers the risk associated with an investment opportunity.

d. All of the above are true.

7. A real estate investment is available at an initial cash outlay of $10,000 and is expected to yield

cash flows of $3,343.81 per year for five years. The internal rate of return is approximately:

a. 2 percent.

b. 20 percent.

c. 23 percent.

d. 17 percent

8. The net present value is equal to:

a. The present value of expected future cash flows, plus the initial cash outlay.

b. The present value of expected future cash flows, less the initial cash outlay.

c. The sum of expected future cash flows, less initial cash outlay.

d. None of the above.

9. Double taxation is most likely to occur if the income-producing properties are held in the form of a(n):

a. S corporation.

b. Limited partnership.

c. C corporation.

d. Real estate investment trust.

e. Limited liability company.

10. Which of the following ownership forms is the least able to flow through tax losses to investors?

a. S corporation.

b. Real estate investment trust.

c. Limited partnership.

d. Limited liability corporation.







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