All of the Following Are True About the "Property Before-Tax

question 2

Multiple Choice

All of the following are true about the "property before-tax (PBT) shortcut", except*:

• A) The PBT shortcut is useful not only because it simplifies the investment analysis but because it avoids the necessity of estimating after-tax parameters that may be difficult to observe without error.
• B) The shortcut is made possible by the existence of a reasonably well functioning market for the type of investment asset in question.
• C) The shortcut works for estimating market value always, and for estimating investment value for investors who are typical of the marginal investors in the relevant asset market.
• D) At the PBT level the investor's own subjective opportunity cost of capital can be used as the discount rate in order to estimate that investor's "investment value" (IV) for the property.

---

Definitions:

Information-Gathering

The process of collecting, finding, and acquiring information relevant to a specific topic or purpose.

Search and Seizure

A legal procedure whereby law enforcement authorities search a person or property and seize evidence pertaining to a crime.

Congressional Delegations

Groups of members from the United States Congress who are assigned to represent the legislative body at official functions or investigate specific issues.

Administrative Agencies

Governmental bodies established to carry out specific laws, conduct oversight, and administer services related to their area of responsibility.