Question

The value of investment real estate A) Is based on the future cash flows the deal...

The value of investment real estate

A) Is based on the future cash flows the deal will generate

B) Differs by individual investors due to differing hurdle rates amongst investors

C) Is determined by financial analysis, then often ultimately decided upon by measuring the riskiness of future cash flows

D) All the above

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Answer #1

The value of real estate investment is based upon all of the following factors-

1. It can be measured by using cash flow discounting methods in which future cash flows are discounting using different discounting rates to arrive at a fair value.

2. Investors use diverse hurdle rates due to their Different expectations out of the investments. Hurdle rate are rate of return an investor expects from certain investment

3. Analysts use to determine the real estate investment by using financial analysis using different tools and them again reapplying the cash flows discounting methods to arrive at a present value

Soy answer will be (D) as all of the three statements are true.

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