Terms in this set (11)
In analyzing the value of a business, the method that is used to determine the value if the business were to bankrupt is called:
When an investor uses borrowed money to purchase a piece of investment property he is taking advantage of:
Which is NOT an advantage of investing in real estate?
Lack of liquidity
What is an income tax term meaning an investment that will reduce or shield other money from income tax?
When a business has been in operation for a long time, what type of value does it have?
Going concern value
An investor was looking at a sixteen-unit apartment building. Four of the units rented for $600, four for $750, four for $800 per month. The building had monthly expenses of $1200. If the investor wants an 8% rate of return l, how much should he pay for the building?
The term 'NOI' MOST NEARLY means:
The amount of money left after the vacancy rate and operating expenses are deducted
The percentage which expresses the amount of risk that an investor is willing to make is called the:
When an investor was analyzing the risks in a property, he was considering an 8% return on his investment compared to a 10% return. In terms of the purchase price, what will happen?
The higher the risk, the lower the purchase price.
An example of an 'intangible' asset for a business would be
The reputation or goodwill of the business
Accrual accounting is where
Shows future income and future debts as they are received and invoiced
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