Which One of the Following Is a True Statement Regarding

question 97

Multiple Choice

Which one of the following is a true statement regarding real estate investments?

• A)It is not possible for real estate values to decrease.
• B)Location is the least important factor when making a real estate investment.
• C)The growth rate of real estate makes it a long-term investment.
• D)There is no reason to evaluate a real estate investment because real estate always increases in value sooner or later.
• E)The growth rate of real estate makes it a "get-rich-quick" scheme.

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Definitions:

Net Present Value

The calculation used to determine the current worth of a future stream of cash flows, adjusted for the time value of money.

Depreciation Tax Shield

The reduction in income taxes that results from taking a deduction for depreciation on the company's tax return, effectively reducing taxable income.

Cash Outlays

Payments in cash for expenses or investments made by a business or individual.

Auto Leases

Contracts that allow a person to use a car for a set period of time in exchange for regular payments, without owning the vehicle.