CERTIFIED GENERAL APPRAISER PRACTICE EXAM
NEWEST 2025-2026 UPDATE REAL PRACTICE EXAM
QUESTIONS & CORRECT ANSWERS | ALREADY
GRADED A+
Content Covered (Most Tested Areas):
• Income Approach (Direct Capitalization, Yield
Capitalization, DCF)
• Highest and Best Use Analysis
• Cost Approach
• Sales Comparison Approach
• Appraisal Math and Financial Calculations
• USPAP and Ethics
• Market Analysis and Valuation Concepts
• Report Writing and Standards
1. An appraiser is valuing a multi-tenant retail center. The property’s
net operating income (NOI) is $480,000. Comparable sales
indicate an overall capitalization rate of 8%. What is the indicated
value by direct capitalization?
A. $5,760,000
B. $6,000,000
C. $6,250,000
D. $6,400,000
Answer: B. $6,000,000
Explanation: Value = NOI ÷ Cap Rate = 480,000 ÷ 0.08 = 6,000,000.
, 2. Which of the following is the correct sequence in a Highest and
Best Use analysis?
A. Financial feasibility, physical possibility, legal permissibility,
maximum productivity
B. Legal permissibility, physical possibility, financial feasibility,
maximum productivity
C. Physical possibility, legal permissibility, financial feasibility,
maximum productivity
D. Legal permissibility, financial feasibility, physical possibility,
maximum productivity
Answer: B. Legal permissibility, physical possibility, financial feasibility,
maximum productivity
Explanation: The four tests are applied in that order to determine
highest and best use.
3. In a discounted cash flow (DCF) analysis, the discount rate
primarily reflects:
A. Property tax rate
B. Market rent growth
C. Required yield of investors
D. Depreciation rate
Answer: C. Required yield of investors
Explanation: The discount rate reflects investor return requirements and
perceived risk.
4. A property’s replacement cost new is $3,200,000. Accrued
depreciation is estimated at $800,000. Land value is $900,000.
What is the indicated value by the cost approach?
A. $3,300,000
, B. $3,100,000
C. $2,400,000
D. $4,100,000
Answer: A. $3,300,000
Explanation: 3,200,000 − 800,000 = 2,400,000. Add land value 900,000
→ 3,300,000.
5. Functional obsolescence caused by an outdated floor plan is
classified as:
A. External obsolescence
B. Curable physical deterioration
C. Incurable functional obsolescence
D. Superadequacy
Answer: C. Incurable functional obsolescence
Explanation: Outdated design typically cannot be economically cured.
6. Gross Rent Multiplier (GRM) is most appropriately applied to:
A. Industrial warehouses
B. Owner-occupied office buildings
C. Small residential income properties
D. Regional shopping centers
Answer: C. Small residential income properties
Explanation: GRM is commonly used for 1–4 unit rental properties.
7. An investor purchases a property for $2,500,000 and expects a
10% annual return. What annual NOI is required?
A. $200,000
B. $225,000
NEWEST 2025-2026 UPDATE REAL PRACTICE EXAM
QUESTIONS & CORRECT ANSWERS | ALREADY
GRADED A+
Content Covered (Most Tested Areas):
• Income Approach (Direct Capitalization, Yield
Capitalization, DCF)
• Highest and Best Use Analysis
• Cost Approach
• Sales Comparison Approach
• Appraisal Math and Financial Calculations
• USPAP and Ethics
• Market Analysis and Valuation Concepts
• Report Writing and Standards
1. An appraiser is valuing a multi-tenant retail center. The property’s
net operating income (NOI) is $480,000. Comparable sales
indicate an overall capitalization rate of 8%. What is the indicated
value by direct capitalization?
A. $5,760,000
B. $6,000,000
C. $6,250,000
D. $6,400,000
Answer: B. $6,000,000
Explanation: Value = NOI ÷ Cap Rate = 480,000 ÷ 0.08 = 6,000,000.
, 2. Which of the following is the correct sequence in a Highest and
Best Use analysis?
A. Financial feasibility, physical possibility, legal permissibility,
maximum productivity
B. Legal permissibility, physical possibility, financial feasibility,
maximum productivity
C. Physical possibility, legal permissibility, financial feasibility,
maximum productivity
D. Legal permissibility, financial feasibility, physical possibility,
maximum productivity
Answer: B. Legal permissibility, physical possibility, financial feasibility,
maximum productivity
Explanation: The four tests are applied in that order to determine
highest and best use.
3. In a discounted cash flow (DCF) analysis, the discount rate
primarily reflects:
A. Property tax rate
B. Market rent growth
C. Required yield of investors
D. Depreciation rate
Answer: C. Required yield of investors
Explanation: The discount rate reflects investor return requirements and
perceived risk.
4. A property’s replacement cost new is $3,200,000. Accrued
depreciation is estimated at $800,000. Land value is $900,000.
What is the indicated value by the cost approach?
A. $3,300,000
, B. $3,100,000
C. $2,400,000
D. $4,100,000
Answer: A. $3,300,000
Explanation: 3,200,000 − 800,000 = 2,400,000. Add land value 900,000
→ 3,300,000.
5. Functional obsolescence caused by an outdated floor plan is
classified as:
A. External obsolescence
B. Curable physical deterioration
C. Incurable functional obsolescence
D. Superadequacy
Answer: C. Incurable functional obsolescence
Explanation: Outdated design typically cannot be economically cured.
6. Gross Rent Multiplier (GRM) is most appropriately applied to:
A. Industrial warehouses
B. Owner-occupied office buildings
C. Small residential income properties
D. Regional shopping centers
Answer: C. Small residential income properties
Explanation: GRM is commonly used for 1–4 unit rental properties.
7. An investor purchases a property for $2,500,000 and expects a
10% annual return. What annual NOI is required?
A. $200,000
B. $225,000
