CA Real Estate Principles Course » 2021 » Section 12 Unit 4 Exam

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Question #1
Burt owns a development company that specializes in constructing new, energy-efficient houses. The best approach for an appraiser to use in the appraisal of Burt's newly built homes is the ______.
A.   Income approach
B.   Cost approach
C.   Sales comparison approach
D.   Appraisal process
Question #2
Related to depreciation, what are the two types of physical deterioration?
A.   Economic and material
B.   Qualitative and quantitative
C.   Internal and external
D.   Curable and incurable
Question #3
In the sales comparison approach, using comparables that are five and 15 years old when appraising a subject that is 10 years old is an example of what?
A.   Bracketing
B.   Bridging
C.   Surrounding
D.   Substituting
Question #4
With the cost approach to value, what is the reproduction cost?
A.   Cost to build an exact replica of the subject, with the same materials and deficiencies
B.   Cost of the materials used in construction
C.   Cost to build a functionally equivalent improvement
D.   Cost to buy the property
Question #5
To make valid computations of adjustments for the sales comparison approach to value, elements of comparison must be applied in a specific order. Which element is applied first?
A.   Physical characteristics
B.   Financing terms and cash equivalency
C.   Conditions of sale
D.   Market conditions
Question #6
Using the income approach, determine the value of a property that has a net operating income of $15,000 and a cap rate of 15%.
A.   $100,000
B.   40%
C.   $15,000
D.   5%
Question #7
An investor is analyzing a three-unit property by looking at its ability to produce future income. Which of the following would most likely be used to determine this value?
A.   Gross rent multiplier
B.   Gross income multiplier
C.   Potential gross income
D.   Effective gross income
Question #8
If a property’s income value is $200,000 and it's earning a net operating income of $40,000, what is the cap rate?
A.   20%
B.   40%
C.   25%
D.   5%

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