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CGA EXACT QUESTIONS WITH COMPLETE ANSWERS
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CGA EXACT QUESTIONS WITH COMPLETE ANSWERS
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CGA EXACT QUESTIONS WITH COMPLETEANSWERS
The "as vacant" highest and best use is for retail and the as improved highest and
best use is for single tenant-office .... What principle underlies the valuation process?
- ANSWER Consistent Use
A property's site is leased for $40,000 per year, which is considered the market rate.
The site represents 35% of the total value. The overall cap rate is 10% and the
building cap rate is 11%. What is the site value? - ANSWER $491,228
A property was purchased for $325, 000 and the buyer expected to hold the property
for five years. The pro forma projections call for a net oper. incoome of $30,000 for
Yrs 1 & 2, $35,000 for Yrs 3& 4 and $37,000 for Yr. 5. The property is expected to
increase in value to $375k at the end of the holding period. What is the overall
capitalization rate from the investment? - ANSWER 12.5%
In preparing a market value appraisal with retrospective date of value, is the
appraiser allowed to consider any info after the eff. date of value, and why? -
ANSWER Yes, the appraiser may use data subsequent to the eff. date as a
confirmation of trends.
Which of the following demand-side economic factors creates value? - ANSWER
Desire and effective purchasing power
*"Always Appears" - If the overall cap rate for the fee simple interest is 10% and the
leased fee cap rate is 8.5%, market net operating income is $20,000 and contract
net operating income is $12,500. What is the implied leasehold cap rate? - ANSWER
14.17%
A staff appraiser, employed by a local bank for 5 years, plans to leave the bank to
open an independent appraisal business. Must the appraiser remove all work files for
assignments completed for the bank? - ANSWER No; the appraiser may make
arrangements with the bank to access or retrieve the files.
The subject property is a 5,000 sf single tenant office building that is currently leased
for $9.00 per sf with three years remaining on the lease... vacancy credit loss 10% ...
owner expenses 25% of of eff. gross income ... market rent $12 per sf per year.
Market overall rates 9.5%. a sale of a leasehold interest sold for $29,000 with a net
leasehold inocme of $12000 per year with 3 yrs remaining. What is the value of the
leasehold estate, rounded to the nearest $1000 - ANSWER $36,000
A property sold for $330, 000 with 10% down, financed at 7.5% interest for 20 years
with monthly payments. The property has a gross annual income of $42k. /
Vacancy / collection loss totals 8% and expenses are $8k per year. What is the
equity dividend rate indicated by this sale? - ANSWER 5.85%
, The market value of a property is $2,300,000 at stabilized occupancy. The direct
building cost is $1,500,000. The indirect costs are $200,000 and the land costs are
$125,000. What is the indicated entrepreneurial profit? - ANSWER $475,000
What term refers to a division of a total market based on the preferences of buyers
and sellers? - ANSWER Submarket
The subject property has 200 acres on improved pasture, 300 acres of native
pasture, and 500 acres of woodland. Comp A has 300 acres of improved pasture,
300 acres of native pasture, and 400 acres of woodland. Comp A sold for $1050 per
acre. Assuming native pasture sells for 80% of improved pasture prices and
woodland sells for 40% of improved pasture prices, what is the per acre value of the
subject property? - ANSWER $960 per acre
An apartment complex was purchased 5 yrs ago for $850k, the owner received the
following net cash flows:
1: 50k
2: 52k
3: 48k ("sometimes the number is another 50k")
4: 53k
5: 54k
At the end of yr. 5 the owner sold the property for $975,000. What is the IRR from
this investment? - ANSWER 8.51%
An office building is expected to generate the following over its 5 year holding period:
Yr 1: $120,000
Yr 2: $130,000
Yr. 3: $120,000
Yr. 4: $140,000
Yr. 5: $145,000
If the appropriate yield rate is 13% what is the level income equivalent of this income
stream? - ANSWER $129, 572
What technique can be utilized to value a leasehold estate? - ANSWER Present
worth of the rent advantage.
The appraiser is asked to value a proposed assisted living facility. The appraiser
surveys the bed count and occupancy at existing faciiliites, checks with local
authorities on other proposed facilities, and interviews operators about any planned
closure of beds. What portion of the market analysis has the appraiser completed? -
ANSWER Supply analysis
A retail space has a net rentable area of 10,000 sf. Market rent is $24 per sf per
year. Contract rent is $22 per sf per year... Considering a 5 yr holding period, how
should the excess rent be discounted in the appraisal of this property? - ANSWER
At a rate lower than market rent.
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