General Appraiser Income Approach Latest Final
Test Review of 450 Recently Tested Questions and
Correct Answers/ Practice Test for General Appraiser
Income Approach Final Exam (2026-2027)
An appraiser describes a rate of return higher than the safe rate as: - ANSWER-
risk rate
A property has a $450,000 mortgage with annual payments of $52,000. The NOI is
$60,000 and the equity cap rate is .07. What is the total property value, based on
this information? - ANSWER-$564,286
The present value of a reversion of $450,000 in 8 years at 8% is: - ANSWER-
$243,121
To calculate the percentage of Vacancy and Collection Loss on an HP-12C, the
appraiser keys in the dollar amount of the PGI and presses [ENTER], then keys in
the: - ANSWER-Actual Income and presses [delta%]
To add two numbers on an HP12C calculator, one enters the first number and then:
- ANSWER-[enter]
The estate that has the right to use an easement is referred to as the: - ANSWER-
dominant estate
The property being appraised can be financed with an 80% mortgage. The term is
20 years with monthly payments at 7%. The mortgage capitalization rate is .0930.
1
,Comparables indicate an equity capitalization rate of 9%. What is the indicated
overall cap rate using the Band of Investment Technique? - ANSWER-0.0924 Ch.
22: Band of Investment (Mortgage Equity). .0930 ENTER .80 [X] .09 ENTER .20
[X] [+]
A minimum criterion to be considered, per the IRS in valuing historic preservation
easements, is that the property must be: - ANSWER-Located in an historic district
Factors like consumptive use and amounts that can be diverted relate to the
appraisal of ____________. - ANSWER-water rights
Marketability studies address: - ANSWER-Absorption of the property into the
market
Real Estate Taxes would be listed under what expense category? - ANSWER-
fixed
If an investor deposits $5,000 to buy a 5-year certificate of deposit (CD), paying
5% compound interest, what would be the balance at the end of the 5 years? -
ANSWER-$6,381.41 Ch. 6. $6,451.41. f [FIN] 5 [n] 5 [i] 5,000 [CHS] [PV] [FV]
Agents of production include Land, Labor, Capital, and: - ANSWER-coordination
It gives credibility to the assignment results when comparable properties that are
analyzed for income are as similar to the subject as possible. Factors to be
considered in determining comparability would include: - ANSWER-Location,
building class, amenities
When other landowners purchase a right that cannot be used by the current owner
for future development, that is a(n): - ANSWER-Transferrable development right
2
,Calculate the IRR if the purchase price was $450,000, and the cash flow started the
first year at $35,000, then increased 3% each year for the 4-year holding period.
Resale is projected to be $525,000. - ANSWER-11.61% Ch. 39: Using the
Calculator: f [FIN], 450,000 [CHS] g [CFo], (initial investment) 35,000 g [CFj],
(Yr 1 cash flow) 103 [%] g [CFj], (Yr 2 cash flow) 103 [%] g [CFj], (Yr 3 cash
flow) 103 [%] (Yr 4 cash flow) 525,000 [+] g [CFj],( Sale reversion) f [IRR]
(Calculate)
The relevant characteristics of an assignment consist of: - ANSWER-Varied
information from assignment to assignment
What is the present value of $100,000 that will be received in 5 years assuming a
7% rate? - ANSWER-$71,298.62
When using commercial DCF software, the appraiser should: - ANSWER-Cite the
name and version in the report
The difference between a property selling for $30,000 thirty years ago, and it
selling for $100,000 today, is predominantly a matter of: - ANSWER-Loss in the
purchasing power of the dollar
Management would be allocated under what expense category? - ANSWER-
variable
A railroad track can be a positive impact on value in the appraisal of: - ANSWER-
Industrial buildings
A national organization involved with office buildings is: - ANSWER-BOMA
3
, What is the Internal Rte of Return if the original purchase price was $300,000, the
annual cash flows are $25,000 for each of the five years of the holding period, and
the resale is projected to be $400,000? - ANSWER-13.43% Ch. 39: Yield Rates
and Definitions-More Terms. f [FIN] 5 [n] 300,000 [CHS] [PV] 25,000 [PMT]
400,000 [FV] [i]
A 25% interest in a partnership that lacks operational control typically has: -
ANSWER-Less than 25% of the total value
Concessions can also contribute to: - ANSWER-both a and b
An appraisal assignment would NOT include a Highest and Best Use analysis if it
was for: - ANSWER-Value-in-use
A percentage rent paid in addition to the base rent is called _______. - ANSWER-
overage rent
Another term appraisers use for a step-up lease is: - ANSWER-Graduated
payment lease
If market rent is greater than contract rent, the leasehold value is _________. -
ANSWER-a positive
A reward or compensation for contribution describes ____________. - ANSWER-
Entrepreneurial profit
An anchor tenant moves out of a shopping center. One space in that center is now
producing an NOI of $15,000. Comparable nearby fully leased space indicates that
it should lease for $20,000. Assuming a cap rate of 11%, and the loss is attributable
to the building and land 50% to each, calculate the external obsolescence that will
4
Test Review of 450 Recently Tested Questions and
Correct Answers/ Practice Test for General Appraiser
Income Approach Final Exam (2026-2027)
An appraiser describes a rate of return higher than the safe rate as: - ANSWER-
risk rate
A property has a $450,000 mortgage with annual payments of $52,000. The NOI is
$60,000 and the equity cap rate is .07. What is the total property value, based on
this information? - ANSWER-$564,286
The present value of a reversion of $450,000 in 8 years at 8% is: - ANSWER-
$243,121
To calculate the percentage of Vacancy and Collection Loss on an HP-12C, the
appraiser keys in the dollar amount of the PGI and presses [ENTER], then keys in
the: - ANSWER-Actual Income and presses [delta%]
To add two numbers on an HP12C calculator, one enters the first number and then:
- ANSWER-[enter]
The estate that has the right to use an easement is referred to as the: - ANSWER-
dominant estate
The property being appraised can be financed with an 80% mortgage. The term is
20 years with monthly payments at 7%. The mortgage capitalization rate is .0930.
1
,Comparables indicate an equity capitalization rate of 9%. What is the indicated
overall cap rate using the Band of Investment Technique? - ANSWER-0.0924 Ch.
22: Band of Investment (Mortgage Equity). .0930 ENTER .80 [X] .09 ENTER .20
[X] [+]
A minimum criterion to be considered, per the IRS in valuing historic preservation
easements, is that the property must be: - ANSWER-Located in an historic district
Factors like consumptive use and amounts that can be diverted relate to the
appraisal of ____________. - ANSWER-water rights
Marketability studies address: - ANSWER-Absorption of the property into the
market
Real Estate Taxes would be listed under what expense category? - ANSWER-
fixed
If an investor deposits $5,000 to buy a 5-year certificate of deposit (CD), paying
5% compound interest, what would be the balance at the end of the 5 years? -
ANSWER-$6,381.41 Ch. 6. $6,451.41. f [FIN] 5 [n] 5 [i] 5,000 [CHS] [PV] [FV]
Agents of production include Land, Labor, Capital, and: - ANSWER-coordination
It gives credibility to the assignment results when comparable properties that are
analyzed for income are as similar to the subject as possible. Factors to be
considered in determining comparability would include: - ANSWER-Location,
building class, amenities
When other landowners purchase a right that cannot be used by the current owner
for future development, that is a(n): - ANSWER-Transferrable development right
2
,Calculate the IRR if the purchase price was $450,000, and the cash flow started the
first year at $35,000, then increased 3% each year for the 4-year holding period.
Resale is projected to be $525,000. - ANSWER-11.61% Ch. 39: Using the
Calculator: f [FIN], 450,000 [CHS] g [CFo], (initial investment) 35,000 g [CFj],
(Yr 1 cash flow) 103 [%] g [CFj], (Yr 2 cash flow) 103 [%] g [CFj], (Yr 3 cash
flow) 103 [%] (Yr 4 cash flow) 525,000 [+] g [CFj],( Sale reversion) f [IRR]
(Calculate)
The relevant characteristics of an assignment consist of: - ANSWER-Varied
information from assignment to assignment
What is the present value of $100,000 that will be received in 5 years assuming a
7% rate? - ANSWER-$71,298.62
When using commercial DCF software, the appraiser should: - ANSWER-Cite the
name and version in the report
The difference between a property selling for $30,000 thirty years ago, and it
selling for $100,000 today, is predominantly a matter of: - ANSWER-Loss in the
purchasing power of the dollar
Management would be allocated under what expense category? - ANSWER-
variable
A railroad track can be a positive impact on value in the appraisal of: - ANSWER-
Industrial buildings
A national organization involved with office buildings is: - ANSWER-BOMA
3
, What is the Internal Rte of Return if the original purchase price was $300,000, the
annual cash flows are $25,000 for each of the five years of the holding period, and
the resale is projected to be $400,000? - ANSWER-13.43% Ch. 39: Yield Rates
and Definitions-More Terms. f [FIN] 5 [n] 300,000 [CHS] [PV] 25,000 [PMT]
400,000 [FV] [i]
A 25% interest in a partnership that lacks operational control typically has: -
ANSWER-Less than 25% of the total value
Concessions can also contribute to: - ANSWER-both a and b
An appraisal assignment would NOT include a Highest and Best Use analysis if it
was for: - ANSWER-Value-in-use
A percentage rent paid in addition to the base rent is called _______. - ANSWER-
overage rent
Another term appraisers use for a step-up lease is: - ANSWER-Graduated
payment lease
If market rent is greater than contract rent, the leasehold value is _________. -
ANSWER-a positive
A reward or compensation for contribution describes ____________. - ANSWER-
Entrepreneurial profit
An anchor tenant moves out of a shopping center. One space in that center is now
producing an NOI of $15,000. Comparable nearby fully leased space indicates that
it should lease for $20,000. Assuming a cap rate of 11%, and the loss is attributable
to the building and land 50% to each, calculate the external obsolescence that will
4
