Chapter 5

Chapter 5

1. What method uses the process of determining the future value of an income by applying the time value of money concepts:

A. Discounting

B. Present Value

C. Internal Rate of Return

D. Compounding

2. An income stream characterized by equal periodic payments over its life is:

A. Annuity

B. Internal Rate of Return

C. Future Value

D. Present Value

3. The value that an income producing asset will enjoy at some specific time in the future:

A. Internal Rate of Return

B. Time Value of Money

C. Future Value

D. Present Value

4. A mortgagor is a real estate lender.

T/F A mortgagee is a real estate lender while a mortgagor is a real estate borrower.

5. Paying off debt can be refered to as amortization.

T/F

6. The net present value is the discounted value of an income producing asset considering both cash inflows to the asset owner and cash outflows from the asset owner.

T/F

7. The process of determining the present value of an income stream is called discounting.

T/F

8. The fixed rate mortgage is the most common type of real estate annuity.

T/F