CCIM 101 MODULE 4 EXAM QUESTIONS WITH VERIFIED SOLUTIONS

CCIM 101 MODULE 4 EXAM QUESTIONS
WITH VERIFIED SOLUTIONS



INVESTMENT VALUE CORRECT ANSWERS THE PRICE AN INVESTOR IS
WILLING TO PAY FOR A SPECIFIC PROPERTY

DIRECT CAPITALIZATION DIFINITION CORRECT ANSWERS THE PROCESS OF
CONVERTING A FUTURE INCOME STREAM INTO A PRESENT VALUE (PV) BY
DIVIDING A A FUTURE INCOME AMOUNT BY A CAP RATE

DIRECT CAPITALIZATION FORMULAS CORRECT ANSWERS INCOME (NOI) (I) =
RXV
RATE (CAP) (R) = I / V
VALUE (V) = I / R

ACQUISITION CAP RATE CORRECT ANSWERS NOI DIVIDE BY PURCHASE
PRICE

DISPOSITION CAP RATE CORRECT ANSWERS SALE PRICE
DISPOSITION ALSO REFERRED TO AS TERMINAL CAP RATE

PROS AND CONS OF THE DIRECT CAPITALIZATION METHOD CORRECT
ANSWERS ADVANTAGE
. SIMPLICITY
. ACCOUNTS FOR VACANCY AND CREDIT LOSSES AND OPERATING EXPENSE
. DISADVANTAGE
. DOSE NOT CONSIDER FINANCING AND TAX IMPACT
. ONLY ONE YEARS NOI WHEN DETERMINING VALUE

(NOI) NET OPERATING INCOME CORRECT ANSWERS .POTENTIAL RENTAL
INCOME
. VACANCY AND CREDIT LOST
. OTHER INCOME ( LAUNDRY, VENDING MACHINE ETC)
. OPERATING EXPENSE

NOI IS CALCULATE CORRECT ANSWERS POTENTIAL RENTAL INCOME
- VACANCY AND CREDIT LOST
= EFFECTIVE RENTAL INCOME
+ OTHER INCOME (COLLECTIBLE)