The lump sum an investor receives upon resale of an investment is referred to as what?

The lump sum an investor receives upon resale of an investment is referred to as what?

• A. Net income
• B. Gross income
• C. Equity dividend
• D. Reversion

Answer: (D)

The lump sum an investor receives upon resale of an investment is called "reversion." This term is used in real estate and investment contexts to describe the amount of money recovered when an investment is sold at the end of its holding period. The concept of reversion is important in evaluating the long-term potential of an investment, as it represents the ultimate return on investment after all holding costs and income have been considered. In contrast, net income refers to the profit an investor earns from an investment over a specified period, typically representing income generated minus expenses. Gross income represents the total income produced before any deductions are made. Equity dividend, on the other hand, pertains to the cash flow distribution to investors after debts and obligations have been serviced, but it does not encompass the total payout upon sale of the asset. Understanding reversion is crucial for appraisers as it helps in determining the overall value of the property and calculating the return on investment.

The lump sum an investor receives upon resale of an investment is called "reversion." This term is used in real estate and investment contexts to describe the amount of money recovered when an investment is sold at the end of its holding period. The concept of reversion is important in evaluating the long-term potential of an investment, as it represents the ultimate return on investment after all holding costs and income have been considered.

In contrast, net income refers to the profit an investor earns from an investment over a specified period, typically representing income generated minus expenses. Gross income represents the total income produced before any deductions are made. Equity dividend, on the other hand, pertains to the cash flow distribution to investors after debts and obligations have been serviced, but it does not encompass the total payout upon sale of the asset. Understanding reversion is crucial for appraisers as it helps in determining the overall value of the property and calculating the return on investment.