FIN 467 Final Exam

Final exam covering advanced topics in finance and investment strategies.

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FIN 467Final ExamPlease use the answer template to submit your answers.1.With regard to double taxation, distributions, andthe treatment of the losses, generalpartnershipsaremostlikea.S corporations.b.C corporations.c.Limitedpartnerships.d.Real estate investment trusts.2.Which statement isfalseconcerning the limitedpartnership form of ownership?a.The general partner has nearly complete controland is liable for debts and actionsof thepartnership.b.The limitedpartners have no managementcontrol and are not liableexcept to theamountof their investment.c.The limited partners cannot enjoy tax deductionbenefits but the generalpartners can.d.The partnership is not a taxable entity.e.None of the above.3.Which is not a function of real estate markets?a.To allocate existing space.b.To expand orcontract space to meet changingconditions.c.To determine land uses.d.To delineate market boundaries.e.All of the above.4.What are the consequences of the fixed locationof real estate?a.The property cannot be moved to takeadvantageof better market opportunitieselsewhere.b.The property cannot be moved to avoid anegative influence on value from usageofadjacent property.c.Market participants must invest more in informationabout the asset because of allthefactors that can affect values at a location.d.Answers a, b, and c are all correct.e.None of the above.5.How much would you pay for the right to receivenothing a year for the next 10 years and$300 a year for the following 10 years if youcan earn 15 percent interest?a.$372.17.

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b.$427.99.c.$546.25.d.$600.88.e.$1,505.63.6.If an income-producing property is priced at$5,000 and has the following income streamYearAfter-Tax Cash Flow1$1,0002-2,00033,00043,000Would an investor with a required rate of returnof 15 percent be wise to invest at thecurrentprice?a.No, because the project has a net presentvalue of _$1,139.15.b.No, because theproject has a net presentvalue of _$1,954.91.c.Yes, because the project has a net presentvalue of $1,069.66.d.Yes, because the project has a net presentvalue of $1,954.91.e.An investor would be indifferent betweenpurchasing and notpurchasing the aboveproperty at the stated price.7.Zoning is an exercise of which type of generallimitation on property rights?a.Eminent domain.b.Taxation.c.Police power.d.Escheat.e.All of the above.8.Ronald Frump, a local real estatetycoon, hasasked you to analyze one of his properties.Itconsists of a one-acre site and a 25-year-oldwarehouse. Specifically, he wants to knowwhether the existing building should be torndown and a new one constructed, and if so,whattype and size of building should be constructed.You consider the zoning and otherconstraints tothe type of property that could be created and decidethe following threealternatives are the mostlikely buildings for the site:
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