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Question 1 of 10
1. Question
Which of the following is a good description of total depreciation from all sources?
Correct
Choices deterioration of physical condition and functional obsolescence are depreciation forms and age depreciation in life is a form for deprecation calculation. The usual term for the total is accrued for all depreciation forms.
Incorrect
Choices deterioration of physical condition and functional obsolescence are depreciation forms and age depreciation in life is a form for deprecation calculation. The usual term for the total is accrued for all depreciation forms.
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Question 2 of 10
2. Question
Which of the following statements about federal regulations is correct?
Correct
In federally related transactions, the cutoff limit for residential properties is $250,000.
Incorrect
In federally related transactions, the cutoff limit for residential properties is $250,000.
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Question 3 of 10
3. Question
Which of the above is not indicative of a transaction involving market value?
Correct
With regard to the price reflecting market value, any of the conditions listed will make the sale suspicious.
Incorrect
With regard to the price reflecting market value, any of the conditions listed will make the sale suspicious.
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Question 4 of 10
4. Question
Which of the following refers to the price of making an exact duplicate of the building is in the cost approach to valuation?
Correct
Replacement costs are the use of updated materials for a duplicate building. The cost of reconstruction is not a word used in the cost approach. After depreciation is excluded from either the duplication or replacement expense, the depreciated cost arrives.
Incorrect
Replacement costs are the use of updated materials for a duplicate building. The cost of reconstruction is not a word used in the cost approach. After depreciation is excluded from either the duplication or replacement expense, the depreciated cost arrives.
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Question 5 of 10
5. Question
Which of the following statements best describes why adjustments are made in the sales comparison technique?
Correct
The method of sales comparison calls for discrepancies between the comparable properties and the subject property to be compensated for by separately making changes to each comparable property to make it as identical as possible to the subject property.
Incorrect
The method of sales comparison calls for discrepancies between the comparable properties and the subject property to be compensated for by separately making changes to each comparable property to make it as identical as possible to the subject property.
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Question 6 of 10
6. Question
For a four-unit building where each unit rents for $750 per month and the average multiplier is 157, what is the value of a residential property enhanced using the gross rent multiplier method?
Correct
First, to account for the four units in the house, you must multiply the $750 rental by 4: $750 x 4 = $3,000 gross monthly rent. Monthly Rental Income = Gross Rent Multiplier = Value is the formula you want to use, so $3,000 x 157 = $471,000.
Incorrect
First, to account for the four units in the house, you must multiply the $750 rental by 4: $750 x 4 = $3,000 gross monthly rent. Monthly Rental Income = Gross Rent Multiplier = Value is the formula you want to use, so $3,000 x 157 = $471,000.
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Question 7 of 10
7. Question
Which of the following statements best describes substitution?
Correct
The substitution theory states that the maximum value of a property is linked to the expense of purchasing a property of equal usefulness.
Incorrect
The substitution theory states that the maximum value of a property is linked to the expense of purchasing a property of equal usefulness.
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Question 8 of 10
8. Question
Which of the following statements best describes accrued depreciation in the expense strategy?
Correct
On any building where it is present, regardless of age, cumulative depreciation from all sources, also known as accumulated depreciation, is measured and then removed from either the reproduction or replacement cost.
Incorrect
On any building where it is present, regardless of age, cumulative depreciation from all sources, also known as accumulated depreciation, is measured and then removed from either the reproduction or replacement cost.
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Question 9 of 10
9. Question
The three-bedroom comparable property has just been sold for $225,000. It is estimated that the worth of a bedroom is $30,000. The properties are the same in all other respects. What is the value of the subject property that is indicated?
Correct
In order to render the comparable (three bedrooms) as the subject (four bedrooms), the value of the bedroom is applied to the purchase price of the comparable: $225,000 + $30,000 = $255,000.
Incorrect
In order to render the comparable (three bedrooms) as the subject (four bedrooms), the value of the bedroom is applied to the purchase price of the comparable: $225,000 + $30,000 = $255,000.
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Question 10 of 10
10. Question
Which of the following situations best describes conformity?
Correct
Conformity is when an extremely modern house in a neighborhood of traditional homes may have a negative effect on its value because it contradicts the concept of colonial homes. Generally, by adopting the concept of consistency in features such as scale, style, and method of construction, property values are better preserved and protected.
Incorrect
Conformity is when an extremely modern house in a neighborhood of traditional homes may have a negative effect on its value because it contradicts the concept of colonial homes. Generally, by adopting the concept of consistency in features such as scale, style, and method of construction, property values are better preserved and protected.