Name: Homework 4

Instructions:

 Question 1 Multiple Answer (1.0000 points) Question: Using discounted cash flow analysis, what is the most an investor wishing to get at least a 10% return should pay for an investment expected to have the following annual cash flows at the end of each year: Year 1: \$15,100 Year 2: \$16,400 Year 3: \$16,800 Year 4: \$16,700 Year 5: \$18,100 + \$188,000 when the investor sells the property at that time. (Check the correct answer.) \$271,100 \$162,983 \$168,669 \$179,281 \$269,908

 Question 2 Multiple Answer (1.0000 points) Question: Using discounted cash flow analysis, what is the most an investor wishing to get at least a 10% return should pay for an investment expected to have the following annual cash flows at the end of each year: Year 1: \$6,000 Year 2: \$6,400 Year 3: \$6,800 Year 4: \$6,700 Year 5: \$7,100 + \$81,000 when the investor sells the property at that time. (Check the correct answer.) \$113,495 \$75,132 \$68,302 \$114,000 \$70,560

 Question 3 Multiple Choice (1.0000 points) Question: Using the Ellwood formula, estimate the required overall rate for an investor who is expected to put down 20%, desires a 13% equity yeild, expects the property to increase 7% during his/her 11 year holding period, and expects to finance the balance of the purchase with a 30 year, monthly payment loan at 9.00% interest. .1020 .0988 .0945 .0956 .0877

 Question 4 Multiple Answer (1.0000 points) Question: Using the Ellwood formula, estimate the required overall rate for an investor who is expected to put down 25%, desires a 13% equity yeild, expects the property to decrease 16% during his/her 10 year holding period, and expects to finance the balance of the purchase with a 30 year, monthly payment loan at 8.75% interest. (Check the correct answer.) .0901 .0913 .0988 .1065 .1075

 Question 5 Multiple Answer (1.0000 points) Question: Using the Ellwood formula, estimate the required overall rate for an investor who is expected to put down 25%, desires a 14% equity yeild, expects the property to decrease 11% during his/her 9 year holding period, and expects to finance the balance of the purchase with a 30 year, monthly payment loan at 10.25% interest. (Check the correct answer.) .1190 .1054 .1259 .1153 .1300