Thursday, February 7, 2013

Chapter 5 questions- Jason Davies

1. (T/F). PGI is the abbreviation for Projected Gross Income.

2. (T/F). To calculate Net Operating Income, you subtract Operating Expenses from Effective Gross Income.

3. (T/F). A Mortgagor is a real estate lender.

4. (T/F). Time Value of Money concepts are developed around the argument that capital is entitled to a return.

5. (T/F). An Amortization Schedule is a table that shows all payments made over the life of a loan.

6. Which of the following terms describes the process of determining the present value of an income stream by applying appropriate time value of money concepts?

a. Discounting
b. Compounding
c. Future Value
d. Present Value

7. Which of the following abbreviations would you use to determine the rate of return that exactly equates the investment outflows with the investment inflows once we consider the timing of cash flows?

a. NPV
b. TVM
c. IRR
d. FV

8. What is the term that describes the systematic reduction of debt through a series of scheduled principal repayments that eventually lead to the complete extinction of the loan?

a. Return on
b. Return of
c. Annuity
d. Amortization

1. F 2. T 3. F 4. T 5. T 6. A 7. C 8. D

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