-Consider the Table Above for a Hypothetical Income Property That

question 40

Multiple Choice

$\begin{array}{rrr}\begin{array}{l}\\\text { NOI } \\\text { DS } \\\text { Cash flow } \\\text { Resale in year } 3 \\\text { Less mortgage balance } \\\text { Total cash flow } \\\text { Present value of cash flow @ } 15 \%\end{array}\begin{array}{rrr}\text { Year 1 } & \text { Year 2 } & \text { Year 3 } \\\$ 72,000 & \$ 74,880 & \$ 77,875 \\60,000 & 60,000 & 60,000 \\\hline \$ 12,000 & \$ 14,880 & \$ 17,875 \\& & 900,000 \\& & -435,000 \\\hline \$ 12,000 & \$ 14,880 & \$ 482,875 \\\$ 10,435 & \$ 11,251 & \$ 317,498\end{array}\end{array}$
-Consider the table above for a hypothetical income property that is under consideration for purchase with a $455,000 loan. Using the principles of mortgage equity capitalization, what is the estimated total property value rounded to the nearest $100) ?

• A) $317,500
• B) $482,900
• C) $772,500
• D) $794,200

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Definitions:

Somatic Sensory

Pertains to the sensory system that conveys information from the skin and muscles, including touch, pain, temperature, and proprioception.

Postcentral Gyrus

The region in the brain's parietal lobe immediately posterior to the central sulcus, responsible for processing somatosensory information from the body.

Prefrontal Cortex

The front part of the frontal lobe in the brain, associated with complex cognitive behavior, personality expression, decision making, and moderating social behavior.

Association Fibers

Nerve fibers in the brain that connect different parts of the same cerebral hemisphere, facilitating communication between them.