Review of Quiz on REFM Excel For Real Estate Certification Level Two

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Question 1 of 39

1. Question

1 point(s)

Finance involves the forecasting of ____ outcomes based on ____ assumptions.

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Question 2 of 39

2. Question

1 point(s)

The ____ of a model identify on what cash is being spent or from what it is being generated; the ____ identify when that cash is spent or generated.

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Question 3 of 39

3. Question

1 point(s)

The Internal Rate of Return, or IRR, is affected by the timing of cash flows.

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Question 4 of 39

4. Question

1 point(s)

The following is the symbol for exponentiation in Excel:

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Question 5 of 39

5. Question

1 point(s)

Which of the following terms refers to the notion that the passage of time introduces potential for both positive and negative change in the value of a dollar?

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Question 6 of 39

6. Question

1 point(s)

The following refers to the ratio of Operating Cash Flow to the Total Cash Investment in an unlevered transaction:

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Question 7 of 39

7. Question

1 point(s)

The future expected cash flows of an investment may be converted to their equivalent Present Values by applying which of the following?

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Question 8 of 39

8. Question

1 point(s)

If $100 is invested today with an assumed Annual Interest/Growth Rate of 10%, what will that $100 be worth at the end of 2 years?

If the Year 3 Future Value of an investment is $150, which of the following would calculate its Present Value assuming an Annual Growth Rate of 5%?

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Question 10 of 39

10. Question

1 point(s)

In forecasting Future Values, it is important to note that the inflation factors for income and expenses are always identical.

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Question 11 of 39

11. Question

1 point(s)

In selecting the Discount Rate for a retail strip center you are considering acquiring, you note that other similar strip centers generate an unlevered 9% Cash on Cash Return. You perceive less risk in the cash flows in your contemplated acquisition compared to these comparable strip centers. All other factors being equal, which Discount Rate would you select to determine your purchase price offer?

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Question 12 of 39

12. Question

1 point(s)

If the Annual Growth Rate for a $700,000 investment is 4%, which of the following formulas would calculate its Future Value at the end of Year 8?

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Question 13 of 39

13. Question

1 point(s)

If the same series of consecutive cash flows in Excel are evaluated for their NPV on a Monthly, rather than on an Annual basis, which of the following accurately describes the difference in the Net Present Value when comparing the NPV assuming the cash flows are Monthly values, as opposed to assuming the cash flows are Annual values?

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Question 14 of 39

14. Question

1 point(s)

What is the sum of the PVs of the three cash flows assuming the following discount rates?

If the IRR for a series of discounted cash flows equals 6%, then a Discount Rate of 7% will yield which of the following?

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Question 18 of 39

18. Question

1 point(s)

If the Discount Rate for a series discounted cash flows equals 6%, and the Net Present Value of Expected Values equals $100,000, which of the following accurately describes the IRR?

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Question 19 of 39

19. Question

1 point(s)

Which Option would yield the higher Net Present Value of Expected Values? Option 1: a sale at the end of Year 3 for $2,000,000 with an Annual Discount Rate of 7%, OR Option 2: a sale at the end of Year 3 for $1,800,000 with an Annual Discount Rate of 4%?

If a mortgaged property is “underwater”, which of the following is true?

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Question 21 of 39

21. Question

1 point(s)

If you purchase a property at a market price of $450,000 with a loan-to-value of 85%, plus $10,000 of purchaser Closing Costs, what is your total cash investment after Closing?

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Question 22 of 39

22. Question

1 point(s)

You purchase a $520,000 property in Year 1 with a loan-to-value of 90%. The loan is Interest Only for the first 5 years. The Market Value decreases over the first 5 years so that the Loan-to-Value equals 102% at the end of Year 5. What is the property’s Market Value at the end of Year 5?

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Question 23 of 39

23. Question

1 point(s)

You wish to find out what you could afford to pay for Land Cost to meet a required 15% profit margin. Please choose the answer which orders the terms in the way they should be entered from top to bottom into the Goal Seek function dialog box. The top selection should correspond to the “Set Cell” space, the middle selection should correspond to the “To Value” space, and the bottom selection should correspond to the “By changing cell” space.

You purchase a property with a Market Value of $520,000 in 2005 using 5-year Interest Only 90% Loan-to-Value financing. In 2010, the Market Value of the property drops to $460,000. You are considering refinancing. The Loan-to-Value you can get for refinancing is only 70%. How much Total Cash Out of Pocket would you need to have to go through with the refinancing and pay back the original loan Principal outstanding?

You are the owner of an office building and want to understand what a future refinancing might look like. What is the maximum allowable debt service amount (cell D22)?

In the capital structure for an investment, the sources of funds must always equal the uses of funds.

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Question 28 of 39

28. Question

1 point(s)

The following consitituent capital element of a real estate transaction is collateralized by the real estate itself:

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Question 29 of 39

29. Question

1 point(s)

The following consitituent capital element of a real estate transaction has the residual claim to the cash flows:

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Question 30 of 39

30. Question

1 point(s)

The following consitituent capital element of a real estate transaction is secured by the equity in the transaction:

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Question 31 of 39

31. Question

1 point(s)

There may be no more than three equity players in any given transaction.

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Question 32 of 39

32. Question

1 point(s)

Which of the following describes a way in which the nature of equity investment and debt financing differ in a development scenario versus an existing asset acquisition scenario?

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Question 33 of 39

33. Question

1 point(s)

Which of the following costs for a development transaction typically scale and decrease in the shape of a bell curve?

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Question 34 of 39

34. Question

1 point(s)

What percent of the total equity does the Partner contribute based on the Total Cost Percentages shown below?

Which of the following formulas for Month 1, if copied and pasted across the Sponsor Equity Draw row, will make all periods of the row pari passu with the Equity Draw of the Partner? (assuming the Partner formula was also adjusted to be pari passu)

Which of the following formulas for Month 1, if copied and pasted across the Partner Equity Draw row, will make all periods of the row pari passu with the Equity Draw of the Sponsor? (assuming the Sponsor formula was also adjusted to be pari passu)