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Homework 6

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  1. Which of the following are appropriate considerations when selecting an appropriate estimated holding period when using the discounted cash flow technique?
    (Check all that apply)
    a.  The type of investment property
    b.  Federal income tax laws
    c.  Local market conditions
    d.  The indicated holding periods as determined by the analysis of comparable properties
    e.   Buyer interviews
  2. When estimating the appropriate vacancy and collection losses for a property, which of the following should be considered?
    (Check all that apply)
    a.  Historic vacancy and collection losses
    b.  An analysis of anticipated lease expirations
    c.  An analysis of current tenant's late payment history
    d.  An analysis of existing competition
    e.  An analysis of proposed competition
  3. When estimating the appropriate level of operativg expenses each period of a discounted cash flow analysis, which of the following should be analyzed?
    (Check all that apply)
    a.  The historic pattern of expenses for the property
    b.  Anticipated price changes for each expense item over the holding period
    c.  Anticipated tenant improvements needed upon leasing vacant space
    d.  Anticipated sales commission upon reversion
    e.  Anticipated marketing expense needed to release space upon lease expirations
  4. When projecting cash flows from refinancing, which of the following must be determined?
    (Check one.)
    a.  The expected year of the refinancing
    b.  The anticipated underwriting standards
    c.  The estimated value of the property and net income at the time of refinancing
    d.  Anticipated loan fees
    e.  Anticipated incidental refinancing fees
  5. When estimating the expected cash flow from reversion, which of the following should be analyzed?
    (Check all that apply)
    a.  An estimated sale price at reversion
    b.  Estimated brokerage fees associated with reversion
    c.  Estimated legal fees associated with reversion
    d.  Estimated transfer taxes associated with reversion
    e.  Tax consequences associated with the reversion form

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