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REE 4103 Unit 7 Quiz.
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REE 4103 Unit 7 Quiz.
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REE 4103 Unit 7 QuizA building that is too large for the neighborhood is an example of functional
obsolescence in the form of overimprovement. Another example of functional
obsolescence is:
a sound building with a worn-out heating system
an awkwardly shaped floor plan in an office building
a residence abutting a new freeway
an older building with modernized elevators - ANS-an awkwardly shaped floor plan in an
office building
Book depreciation refers to
Functional losses in market value from all causes
Losses in market value due to scheduled depreciation
Losses in value due to excessive obsolescence
Losses in value from an accounting perspective on the balance sheet of a business tax
return - ANS-Losses in value from an accounting perspective on the balance sheet of a
business tax return
By estimating replacement cost in lieu of reproduction cost, an appraiser
Eliminates all functional obsolescence
Builds in functional obsolescence due to changing building standards
Eliminates the need to measure many, but not usually all, forms of functional
obsolescence
Increases the amount of depreciation - ANS-Eliminates the need to measure many, but
not usually all, forms of functional obsolescence
Cost is:
always the same as value.
always the same as price.
never exceeds value.
none of the above. - ANS-none of the above
Depreciation
Accrues on a straight-line basis (i.e., each year's depreciation is the same as the
previous year)Accrues to the land and building according to the land-to-building ratios
listed in the appraisal report
Is the difference between the cost of the improvements and the value as of the effective
date of appraisal
, Is always due to wear and tear on the improvements - ANS-Is the difference between
the cost of the improvements and the value as of the effective date of appraisal
Depreciation is
The difference between the reproduction or replacement cost and the market value of
the improvements as of the effective date of appraisal
The percentage loss in value based on the ratio of total economic life to effective age
A systematic method of reducing costs for physical deterioration
Classified as physical, functional, or political - ANS-The difference between the
reproduction or replacement cost and the market value of the improvements as of the
effective date of appraisal
Direct costs are
Expenditures for items that are necessary but are not usually included in the
construction contract
Expenditures for the labor and material used in the construction of the improvements
An incentive that is market derived and provides compensation for the developer
The costs associated with a change in title - ANS-Expenditures for the labor and
material used in the construction of the improvements
Entrepreneurial incentive is
The amount of money entrepreneurs receive as a reward for their efforts
The amount of money reserved for unforeseen expenses
The amount of money entrepreneurs can borrow
The amount of money entrepreneurs expect to receive as a reward for their efforts -
ANS-The amount of money entrepreneurs expect to receive as a reward for their efforts
In the cost approach _____ is deducted after estimating the cost to reproduce an
existing structure
Land cost
Depreciation
Cash equivalence
Personal property value - ANS-Depreciation
In the cost approach, the valuation of land involves the principle of:
conformity
Contribution
Highest and Best use
variable proportions - ANS-Highest and Best use
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