REAE 3325 Unit 1 Section 5 Quiz Review with Complete Solutions
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Course
REAE 3325
Institution
REAE 3325
REAE 3325 Unit 1 Section 5 Quiz Review with Complete SolutionsREAE 3325 Unit 1 Section 5 Quiz Review with Complete SolutionsREAE 3325 Unit 1 Section 5 Quiz Review with Complete SolutionsREAE 3325 Unit 1 Section 5 Quiz Review with Complete Solutions
Highest and best use analysis is only necessary f...
REAE 3325 Unit 1 Section 5 Quiz Review
with Complete Solutions
Highest and best use analysis is only necessary for a vacant piece of land with no
zoning requirements. - ANSWER-False
Which of the following is not a form of depreciation utilized in the Cost Approach? -
ANSWER-Accounting depreciation
Cap rates can be determined by dividing the ___________ by the _____________. -
ANSWER-Price (or value); NOI.
In Texas, USPAP is maintained by the Texas Real Estate Commission. - ANSWER-
False
In an income proforma, subtracting Operating Expenses and any Capital Expenditures
from Effective Gross Income results in ______________. - ANSWER-Net Operating
Income
What is the sales price if a building sells on a 9% cap rate with an NOI of $100,000? -
ANSWER-$100,.09 = $1,111,111.11
The Effective Gross Income Multiplier can be determined by dividing the ___________
by the ___________. - ANSWER-derived valuation; effective gross income.
In the Sales Comparison Approach, if the subject has a better location than the
comparable, the appraiser would need to adjust the comparable value: - ANSWER-Up
What is the cap rate if a building sells for $2,000,000 with an NOI of $200,000? -
ANSWER-$2,000,000 / $200,000 = 10
What is the cap rate if a building sells for $12,000,000 with an NOI of $800,000? -
ANSWER-$12,000,000 / $800,000 = 15
Sales rates can be determined by dividing ___________ by the ___________. -
ANSWER-NOI; cap rate.
What is the sales price if a building sells on a 7% cap rate with an NOI of $100,000? -
ANSWER-$100,.07 = 1,428,571.43
If the Effective Gross Income is $100,000 and the derived valuation was $1,000,000,
what was the Effective Gross Income Multiplier? - ANSWER-10
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