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Calculate the effective gross income of this building: It has
$30,000,000 in gross
potential income, a vacancy cost of $1,500,000, and
$2,900,000 in other
income.
$31,400,00
0
$34,400,00
0
$28,600,00
0
$25,600,000 - ANSWER -
$31,400,000
The building has an effective gross income of $31,400,000. PGI
+ Other income
- Vacancy cost = EGI. So, $30,000,000 + $2,900,000 -
$1,500,000 =
$31,400,000.
,If a building has an effective gross income of $31,400,000 and
$25,000,000 in operating expenses, what is its net operating
income?
$25,000,000
$31,400,000
$6,400,000
$56,400,000 - ANSWER -$6,400,000
The property owners of the Goliath National Bank building pay
a monthly mortgage payment of $520,000. What is the annual
debt service cost of the Goliath National Bank Building?
$6,240,000
$520,000
$10,500
$6,400,000 - ANSWER -$6,240,000
The annual debt service cost of the Goliath National Bank
building is
$6,240,000. Its net operating income is $6,400,000. What is the
before-tax cash flow of the Goliath National Bank building?
$6,526,000
$520,000
$160,000
$12,640,000 - ANSWER -$160,000
All of the following are types of taxes that affect real estate
investments
EXCEPT:
,payroll taxes
capital gains
taxes income
taxes
property taxes - ANSWER -payroll taxes
Elizabeth is calculating the after-tax cash flow of a property she
invested in. The
before-tax cash flow is $1,500,000. The amount of income taxes
she has to pay
is $215,000. What is the after-tax
cash flow?
$1,285,000
$1,715,000
$1,832,660
$990,450 - ANSWER -
$1,285,000
What is the total investment cost for the prospective buyers of
the GNB building
based on the following information? They have a $1,700,000
down payment,
$200,000 in attorney fees, $50,000 in inspection fees, and
$50,000 in title
insurance
fees.
$1.4M
$1.9M
$2.0M
, $1.7M - ANSWER -
$2.0M
What is the cash-on-cash return of the GNB building? Its
before-tax cash flow is $160,000 and the buyers' proposed total
investment cost is $2,000,000.
8%
8.9%
89%
1.2% - ANSWER -8%
At the listing price of $160,000,000, what is the cap rate of the
GNB building? Its net operating income is $6,400,000.
4%
2.5%
40%
25% - ANSWER -4%
Select the sales price below that reflects a building with a cap
rate of 8% and a net operating income of $6,400,000.
$51.2M
$800K
$80M
$8M - ANSWER -$80M
Which of the investors' needs is the internal rate of return most
likely to meet? Ina is looking for a property that will produce a
return quickly through its cash flow.