CCIM 101 EOC EXAMS QUESTIONS AND ANSWERS
SET A+
✔✔Value in Use - ✔✔The property's value from a user's operational standpoint (its
contribution to business profitability).
✔✔Investment Value - ✔✔The property's value from an investor's perspective, based
on expected returns and risk.
✔✔Market Value - ✔✔The appraiser's estimate for a typical investor based on highest
and best use and likely selling price.
✔✔Income Approach - ✔✔Values a property by projecting and discounting its cash
flows or by capitalizing NOI with a direct cap rate.
✔✔Cost Approach - ✔✔Values a property based on the cost to replace it minus
depreciation, plus land value.
✔✔Sales Comparison Approach - ✔✔Values a property by comparing it to similar
properties sold recently.
✔✔Discount Rates - ✔✔The rate used to discount future cash flows to their present
value.
✔✔Leveraged vs. Unleveraged Discount Rates - ✔✔The discount rate for equity
(leveraged cash flows) is typically higher than the unleveraged discount rate (total
property cash flows) because equity investors take on additional risk.
✔✔Selecting a Discount Rate - ✔✔Often determined by a build-up method starting with
a risk-free rate (reflecting pure TVM), adding expected inflation, and a risk premium.
SET A+
✔✔Value in Use - ✔✔The property's value from a user's operational standpoint (its
contribution to business profitability).
✔✔Investment Value - ✔✔The property's value from an investor's perspective, based
on expected returns and risk.
✔✔Market Value - ✔✔The appraiser's estimate for a typical investor based on highest
and best use and likely selling price.
✔✔Income Approach - ✔✔Values a property by projecting and discounting its cash
flows or by capitalizing NOI with a direct cap rate.
✔✔Cost Approach - ✔✔Values a property based on the cost to replace it minus
depreciation, plus land value.
✔✔Sales Comparison Approach - ✔✔Values a property by comparing it to similar
properties sold recently.
✔✔Discount Rates - ✔✔The rate used to discount future cash flows to their present
value.
✔✔Leveraged vs. Unleveraged Discount Rates - ✔✔The discount rate for equity
(leveraged cash flows) is typically higher than the unleveraged discount rate (total
property cash flows) because equity investors take on additional risk.
✔✔Selecting a Discount Rate - ✔✔Often determined by a build-up method starting with
a risk-free rate (reflecting pure TVM), adding expected inflation, and a risk premium.
