Unit 9: Cost of Borrowed Money Quiz PDF

**Unit 9: The Cost of Borrowed Money** **Unit Outline** This unit addresses the mechanics of computing payments and the annual debt service. It then considers ways to compare the incremental costs and benefits of alternative debt structures. A. Interest Costs and Rates B. Comparison of Financing...

**Unit 9: The Cost of Borrowed Money** **Unit Outline** This unit addresses the mechanics of computing payments and the annual debt service. It then considers ways to compare the incremental costs and benefits of alternative debt structures. A. Interest Costs and Rates B. Comparison of Financing Alternatives C. Incorporating Leverage Into the Operating Projection **Unit 9 Quiz** **1. A developer purchases 20 acres of pasture on which to build a Super Target store and a Home Depot. The demographics in the area, and the traffic counts on the two boundary roads, support the project. What type of tax should most concern the developer?** **a. assessment** **b. rollback** **c. current use** **d. highest and best use** **2. What is the greatest concern for a lender regarding property taxes?** **a. Increasing taxes might increase total expenses in excess of required DCRs** **b. Non payment of property taxes is an early warning sign of borrower trouble** **c. Foreclosure by the lender might result in loss of waivers and unacceptably high holding costs** **d. Non payment of property taxes could trigger the consequences of a super priority** **3. A newspaper article reports City Council approval of the following projects for an area of town in which you are considering investing. Which item might indicate increased property tax expenses in the near future?** **a. Widening a major artery** **b. New library** **c. Additional 1.5 miles of sanitary sewer** **d. Expansion of local high school** **4. In most jurisdictions, disputes over property appraisals upon which taxes are calculated can be accomplished through the** **a. Board of equalization** **b. Board of adjustment** **c. City council** **d. County (or parish) tax board** **5. Which property right is probably NOT liable for property taxes?** **a. Three-year residential lease** **b. Twenty-year ground lease** **c. Life estate** **d. Mineral rights**