Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:The students reported their preferences by circling the color of the ice cream they liked best on a secret ballot.   Answer

Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:The 26 test subjects were selected not just from the first grade, but from the school’s second through fifth grades as well.

Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:The nutritional value of all three flavors are roughly the same.   

Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:The pink dye in the bubble gum tutti frutti ice cream is a substance known to the state of California to cause cancer.

   Analyze the following argument in terms of new case, comparison cases, known similarities, and inferred similarity. Then indicate what seems to you the most significant relevant dissimilarity between the new case and the comparison cases.For the first 6 to 8 weeks of pregnancy, the fetus has no brain waves. It’s like a brain-dead adult. So, just as it is morally permissible to take a brain dead adult off life-support, it’s OK to take a 6 to 8 week old fetus off maternal life support.   

Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:Mrs. Newsome told her class that unless they quieted down and minded their manners while the nice researchers were preparing the test samples, they wouldn’t get to try the bubble gum tutti frutti flavor; they would only get the chocolate and vanilla.   

Consider the following example of inductive reasoning:In September 2019, each student in Mrs. Newsome’s first grade class (Hank James Elementary in Woolett, Massachusetts) was given three 2 oz. scoops of ice cream: one vanilla, one chocolate, and one bubble-gum tutti frutti. 2 of the 26 students preferred chocolate, 4 preferred vanilla, and 20 preferred bubble-gum tutti frutti. Researchers concluded that, with respect to ice cream flavors, American children prefer bubble gum tutti frutti to chocolate or vanilla.Now consider the following modification of the argument, and indicate if it strengthens the argument (makes it more likely that the conclusion is true), weakens the argument (makes this less likely), or has no effect. Then explain why you think this is so:The sugar content for the vanilla ice cream was higher than for the other two flavors.

One market characteristic that is a good proxy for apartment demand growth is projected household income growth.  Suppose you are assessing an investment opportunity in multifamily real estate and, in the local multifamily real estate market, apartment building prices currently equal replacement costs. And, suppose that you anticipate that there will be household income growth over the next several years.  Applying the Smith model from class, is that income growth likely to yield growth in apartment prices?

UPLOAD YOUR ANSWERS TO THIS QUESTION IN THE UPLOAD BOX AT THE END OF THE QUESTION. You are a property owner leasing 2,000 square feet of office space to a startup AI company.  If the terms for a five-year lease are an annual rent of $200 per square foot, $100 per square foot of tenant improvements (before the tenant moves in), and the first two years rent-free, what is the annual effective rent if your discount rate is 7.0%?

UPLOAD YOUR ANSWERS TO THESE QUESTIONS IN THE UPLOAD BOX AT THE END OF THE QUESTION. You must show your work in order to receive partial credit.  Feel free to re-use calculations from previous questions rather than rewriting them. You are considering purchasing a warehouse property near Philadelphia.  The warehouse has 40,000 square feet, 100% occupied by one tenant.  Here is the key information about the property, your financing, and your tax situation: Investment:$10,000,000 acquisition price, of which 30% is attributable to land. Assume the purchase occurs at the end of 2026 and the first year of positive cash flows is 2027.  Assume all cash flows are at the end of the year. Sale:10-year holding period (you sell at the end of 2036).  Assume the exit cap rate will be 5.0%.  There are no sales expenses. Tenant’s Lease:Rent is $640,000 per year, triple-net, no escalations, with 12 years remaining in the lease term. Replacement reserve:$24,000 per year, paid by you. Assume you set it aside and spend it right before the sale of the property.  (This means that you neither expense it nor depreciate it – this is how we treated it in the class example.) Taxes: Your income tax rate is 29.6% and the depreciation lifetime is 39 years, straight-line. Financing:$7,000,000 loan amount. 6.0% interest rate, 30-year amortization schedule, 10-year term, annual payments, non-recourse, non-assumable, no fees.  Here is the amortization schedule:   1)  (9 points.)  What are NOI after reserves, BTCF from operations, and ATCF from operations in 2029? 2)  (6 points.)   How much would you project the BTCF from sale (not ATCF!) would be at the end of 2036, assuming that 2037 NOI after reserves is expected to be $616,000? 3)  (12 points.)  Do you think the going-out (exit) cap rate is a reasonable assumption based on the information given in the problem?  Why or why not?