If the Market Value Cap Rate Yield) on a Certain

question 17

Multiple Choice

If the market value cap rate yield) on a certain type of property is 10%, and you expect the property to appreciate at 3% per year, what discount rate total return) should be applied to determine the market value in a multi-year DCF analysis?

• A) 3%
• B) 10%
• C) 11.5%
• D) 13%
• E) 7%

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Definitions:

Cost of Goods Sold

The specific expenses directly associated with the manufacturing of products a company sells, such as raw materials, workforce costs, and overhead expenses related to the production process.

Beginning Inventory

The value of all inventory held by a company at the start of an accounting period, before any purchases are made.

Operating Cycle

The operating cycle is the duration of time that takes for a company to purchase inventory, sell it to customers, and collect the cash from the sales.

Accounts Receivable

Outstanding payments due to a firm from its customers for delivered goods or services awaiting payment.