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.   Sales comparison approach
C.   Cost approach
D.   Appraisal process
Question #2
Related to depreciation, what are the two types of physical deterioration?
A.   Economic and material
B.   Internal and external
C.   Qualitative and quantitative
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.   Surrounding
B.   Bridging
C.   Substituting
D.   Bracketing
Question #4
With the cost approach to value, what is the reproduction cost?
A.   Cost of the materials used in construction
B.   Cost to build a functionally equivalent improvement
C.   Cost to buy the property
D.   Cost to build an exact replica of the subject, with the same materials and deficiencies
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.   Market conditions
B.   Conditions of sale
C.   Financing terms and cash equivalency
D.   Physical characteristics
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.   5%
B.   $100,000
C.   $15,000
D.   40%
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 income multiplier
B.   Potential gross income
C.   Gross rent multiplier
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.   5%
B.   25%
C.   20%
D.   40%

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