Chapter 8

Question 1

Which of the following expenses is not an operating expense?

Answer 1

Mortgage Payment

Question 2

An overall capitalization rate (R) is divided into which type of income or cash flow to obtain an indicated value?

Answer 2

Net Operating Income (NOI)

Question 3

Which of the following types of properties would probably not be appropriate for income capitalization?

Answer 3

Public School

Question 4

Reserves for replacement and other non-recurring expenses are allowances that reflect?

Answer 4

The annual depreciation of the short lived components of the building and expenses that occur only occasionally

Question 5

An appraiser estimates that a property will produce a NOI of $25,000, the overall yield (Y) is 11%, and the growth rate is 2%. What is the total property value (un-rounded)?

Answer 5

$277,778

Question 6

If a comparable property sells for $1,200,000 and the effective gross income of the property is $12,000 per month, the gross income multiplier is?

Answer 6

8.33

Question 7

The final value estimate produced by one approach is called?

Answer 7

The indicated value

Question 8

The methodology of appraisal differs from that of investment analysis primarily regarding?

Answer 8

Point of view and type of data used