GENERAL APPRAISER INCOME APPROACH
FINAL TEST BANK 3 EXAM WITH ACTUAL
CORRECT QUESTIONS AND VERIFIED
DETAILED ANSWERS| CURRENTLY TESTING
VERSION | ALREADY GRADED
A+|NEWEST|EXPERT VERIFIED FOR
GUARANTEED PASS 2026/2027
A common part of the rent payment provisions in a lease is often a ___________
provision to allow the Lessee a time period to pay rents due after the due date without
incurring any penalty.
Grace Period
Which of the following types of rent would fit into all lease types?
Contract rent
Another term for tenant improvements is
Leasehold improvements
The tenant is responsible for paying utilities and taxes. The landlord pays all other
expenses. This is an example of which kind of lease?
Net
The most common index for an index lease is the:
CPI
Another term for a step-up lease is:
Graduated payment lease
A percentage rent paid in addition to the base rent is called:
1|Page
,Overage Rent
In a Net Net Lease, the lessee pays:
Utilities, taxes, and insurance
_____ gives the tenant the right to occupy a property for an unspecified amount of time.
Leasehold estate at will
A lease that involves future rents being determined by market rents at predetermined
intervals would be a:
Revaluation lease
A lease interest in which the tenant has possession for an unspecified time period at the
mutual convenience of the parties is a:
Leasehold at will
Because terms like "gross lease", "modified gross lease", or "double net lease" mean
different things to different people, the appraiser should ensure that any such terms are
fully explained in the appraisal report so intended users are not mislead.
True
A flat rent lease has a specified rental amount that remains constant for the duration of
the lease. What is another term used to describe a flat rent lease?
Level payment lease
In USPAP, Statement on Appraisal Standards Number 2 is about
Discounted cash flow analysis
In order to increase the occupancy of his office building, the landlord offered one month
free rent. Without the concession, the annual rent would be $12,000. With the
concession, the annual rent is $11,000. What is another term for the $11,000 annual
rent?
Effective Rent
2|Page
,A lease in which the lessor pays all the utilities, property taxes, and services is a:
Gross Rent Lease
According to USPAP, "The value of the whole..."
May equal, exceed or be less than the sum of the parts
In appraisal practice, cash flows are always valued using the END mode.
False
If the market rents show the convenience store rental should be $3,000 per month
rather than the $2,000 contracted for the full 5 year term of the lease, and you use the
same 9% rate, what is the value of the convenience store's leasehold calculated on the
monthly difference (assuming payments at the end of the month)?
$48,173.37
The answer to the Chapter 10 case study is:
$655,834.48
As a general rule, when space is owner occupied and used, the "rent" for that space is
included in the Potential Gross Income. The exception to this is which of the following
properties?
Hotel
Net Operating Income divided by a derived rate equals ____________.
Value
The proceeds received by an investor at the end of the holding period are known as:
reversion
The income remaining after deduction of vacancy and collection allowances is referred
to as the:
Effective Gross Income
In valuing the leased fee interest, the appraiser utilized:
3|Page
, Actual rents
The definition of market value which appears in the Definitions of USPAP is the
definition which has been agreed upon by agencies that regulate federal financial
institutions in the United States.
False
Equity Dividend is another name for:
Before tax cash flow
The income that an investment property could generate if 100% occupied is called the:
Potential Gross Income
After-Tax Cash Flow is dependent upon the individual investor's tax rate, so it is more
commonly used when seeking which type of value:
Investment Value
Another name for Business Value is:
Going concern value
Potential gross income (PGI) presumes ___________ income:
Annual
Before-Tax Cash Flow is the next category after:
Deducting Annual Debt Service
The income that an investment property could generate if 100% occupied is called the:
Potential Gross Income
The Potential Gross Income for an office building is $100,000. 6% of the PGI is lost
annually to vacancy and collection. What is the dollar amount of the vacancy and
collection loss?
$6,000
4|Page
FINAL TEST BANK 3 EXAM WITH ACTUAL
CORRECT QUESTIONS AND VERIFIED
DETAILED ANSWERS| CURRENTLY TESTING
VERSION | ALREADY GRADED
A+|NEWEST|EXPERT VERIFIED FOR
GUARANTEED PASS 2026/2027
A common part of the rent payment provisions in a lease is often a ___________
provision to allow the Lessee a time period to pay rents due after the due date without
incurring any penalty.
Grace Period
Which of the following types of rent would fit into all lease types?
Contract rent
Another term for tenant improvements is
Leasehold improvements
The tenant is responsible for paying utilities and taxes. The landlord pays all other
expenses. This is an example of which kind of lease?
Net
The most common index for an index lease is the:
CPI
Another term for a step-up lease is:
Graduated payment lease
A percentage rent paid in addition to the base rent is called:
1|Page
,Overage Rent
In a Net Net Lease, the lessee pays:
Utilities, taxes, and insurance
_____ gives the tenant the right to occupy a property for an unspecified amount of time.
Leasehold estate at will
A lease that involves future rents being determined by market rents at predetermined
intervals would be a:
Revaluation lease
A lease interest in which the tenant has possession for an unspecified time period at the
mutual convenience of the parties is a:
Leasehold at will
Because terms like "gross lease", "modified gross lease", or "double net lease" mean
different things to different people, the appraiser should ensure that any such terms are
fully explained in the appraisal report so intended users are not mislead.
True
A flat rent lease has a specified rental amount that remains constant for the duration of
the lease. What is another term used to describe a flat rent lease?
Level payment lease
In USPAP, Statement on Appraisal Standards Number 2 is about
Discounted cash flow analysis
In order to increase the occupancy of his office building, the landlord offered one month
free rent. Without the concession, the annual rent would be $12,000. With the
concession, the annual rent is $11,000. What is another term for the $11,000 annual
rent?
Effective Rent
2|Page
,A lease in which the lessor pays all the utilities, property taxes, and services is a:
Gross Rent Lease
According to USPAP, "The value of the whole..."
May equal, exceed or be less than the sum of the parts
In appraisal practice, cash flows are always valued using the END mode.
False
If the market rents show the convenience store rental should be $3,000 per month
rather than the $2,000 contracted for the full 5 year term of the lease, and you use the
same 9% rate, what is the value of the convenience store's leasehold calculated on the
monthly difference (assuming payments at the end of the month)?
$48,173.37
The answer to the Chapter 10 case study is:
$655,834.48
As a general rule, when space is owner occupied and used, the "rent" for that space is
included in the Potential Gross Income. The exception to this is which of the following
properties?
Hotel
Net Operating Income divided by a derived rate equals ____________.
Value
The proceeds received by an investor at the end of the holding period are known as:
reversion
The income remaining after deduction of vacancy and collection allowances is referred
to as the:
Effective Gross Income
In valuing the leased fee interest, the appraiser utilized:
3|Page
, Actual rents
The definition of market value which appears in the Definitions of USPAP is the
definition which has been agreed upon by agencies that regulate federal financial
institutions in the United States.
False
Equity Dividend is another name for:
Before tax cash flow
The income that an investment property could generate if 100% occupied is called the:
Potential Gross Income
After-Tax Cash Flow is dependent upon the individual investor's tax rate, so it is more
commonly used when seeking which type of value:
Investment Value
Another name for Business Value is:
Going concern value
Potential gross income (PGI) presumes ___________ income:
Annual
Before-Tax Cash Flow is the next category after:
Deducting Annual Debt Service
The income that an investment property could generate if 100% occupied is called the:
Potential Gross Income
The Potential Gross Income for an office building is $100,000. 6% of the PGI is lost
annually to vacancy and collection. What is the dollar amount of the vacancy and
collection loss?
$6,000
4|Page
