REAL 4000 UGA Test 2 Practice
Questions and Answers
the home valuation code of conduct was designed to - Answer️️ -
decrease the lender's ability to influence appraisals
all else equal, a higher discount rate will... - Answer️️ -DECREASE
the PV of future cash flows
the feasibility of ...
REAL 4000 UGA Test 2 Practice
Questions and Answers
the home valuation code of conduct was designed to - Answer✔️✔️-
decrease the lender's ability to influence appraisals
all else equal, a higher discount rate will... - Answer✔️✔️-DECREASE
the PV of future cash flows
the feasibility of new construction is dependent on the relationship
btwn current property prices + cost of new construction.
the supply of properties will increase if... - Answer✔️✔️-the current
property values are greater than the cost of construction
(all about profit @ the end of the day)
what is the direct capitalization method anyway? - Answer✔️✔️-it's
when the value estimates are based on a multiple of expected first
year net operating income (NOI)
what is a capital expenditure (capx)? - Answer✔️✔️-an expense that
will add long-term value to the home (ex: a roof replacement)
basic direct cap equation? - Answer✔️✔️-projected first year NOI /
overall cap rate
when do you use PMT? - Answer✔️✔️-when there are monthly
payments involved (called an annuity)
how are cap rates for commercial properties related to risk? -
Answer✔️✔️-cap rates are directly related to the perceived risk of the
property.
EGIM method of valuation - Answer✔️✔️-sale price / effective gross
income (make sure to calculate EGI for the right time frame ex:
annual, monthly, etc)
cost approach of valuation - Answer✔️✔️-reproduction/replacement
cost + any additional value - depreciation = indicated value
what compounding frequency will give you the greatest return? -
Answer✔️✔️-daily. basically the more often your principal amt is
compounded, the more money you'll make (duh)
will the future value of an annuity due be greater or less than that
of a regular annuity? - Answer✔️✔️-it will be greater!!
why? idk
in the sales comparison approach, you start with the sales price of
the ______________ and adjust it - Answer✔️✔️-you start with the
2
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