RPA LEVEL 3 SCRIPTED EXAMS ANSWERS AND
QUESTIONS SET A+
✔✔An area of complimentary land uses in which all properties are similarly affected by
physical, governmental, social, and economic forces is a - ✔✔Unit of analysis
✔✔Economic forces which have the greatest effect on property values are properties
operating at the level of - ✔✔Locality
✔✔Stability of currency (US dollar trading on world markets) is what type of force? -
✔✔International
✔✔How do you use a sales adjustment grid? - ✔✔Use paired sales analysis to
determine the difference in value between characteristics
✔✔Replacement cost new is the cost to construct: - ✔✔a building to equal quality
✔✔Which of the following is an indirect cost: - ✔✔Engineering fees
✔✔You notice the roof of a single-family residence sags considerably and receive the
owner's permission to inspect the attic. You discover that several rafters are broken. It
would cost $12,500 to repair the roof. Repairs would add $15,000 to the market value of
the property. What kind of depreciation is this? - ✔✔Curable physical short-lived
deterioration
✔✔Which one of the following is an advantage to the cost approach? - ✔✔Can be
applied to virtually any type of property
✔✔Percent good is the percentage of a property's value: - ✔✔that remains after
depreciation
✔✔The economic life of an asset refers to the: - ✔✔number of years over which an
asset is useful
,✔✔Depreciation is best described as - ✔✔A reduction or loss in value from all causes
✔✔Allocation by ratio is a technique for arriving at - ✔✔land value
✔✔Ideally, to build the most accurate schedule for each benchmark property, you
should use the - ✔✔quantity-survey method
✔✔in constructing a cost-schedule, the major effort is given to distinguishing between -
✔✔construction types
✔✔The cost Approach is most effective if the property use is - ✔✔consumptive use
✔✔Cost Approach - ✔✔The process of estimating the value of a property by adding to
the estimated land value the appraiser's estimate of the reproduction or replacement
cost of the building, less depreciation.
✔✔The key concept in replacement cost new is - ✔✔equal utility
✔✔Cost-index trending gives an estimate of - ✔✔Reproduction cost only
✔✔Functional Obsolescence - ✔✔A loss of value to an improvement to real estate
arising from functional problems, often caused by age or poor design.
✔✔Functional obsolescence is curable or incurable because of the relationship between
the cost of repair and the - ✔✔gain in market value after the cure
✔✔The form of depreciation that influences land and improvement value is -
✔✔economic obsolescence
✔✔A Problem inherent in the use of the cost approach to value is it: - ✔✔requires either
market or income approach to value land
✔✔What is the first step in the Cost Approach? - ✔✔Estimate the land (site) value as if
vacant and available for development to its highest and best use
✔✔Which cost method is most often used in Mass Appraisal? - ✔✔Comparative Unit
Method
✔✔What is the formula for land valuation by Allocation by Abstraction? - ✔✔Property
Value - Improvement Value = Land Value
Sale price of property - RCNLD = Land Value
, ✔✔The typical land to property ratio in the area is 1:5. An improved property is
appraised at $150,000. What is the land value? - ✔✔$30,000
✔✔Values in the market for your area are increased at 2% per month. Subject property
sold 4 months before your appraisal date for $100,000. What is the sale price adjusted
for time? - ✔✔$108,000
✔✔Cost schedules typically reflect? - ✔✔Replacement cost new
✔✔Book construction cost index for property constructed in 1982 is 1020.8 and current
cost index for 2022 is 1200.4. Structure cost is $157,500 in 1982. What is the present
reproduction cost new? - ✔✔$184,204
✔✔What is the depreciation (lump sum) of the following property using both the physical
age life and the effective (economic) age/life method? (RCN = $100,000. Actual Age =
10 years. Effective Age = 5 years. Economic Life = 50 years. ) - ✔✔Physical .20
$20,000 and Economic .10 $10,000.
✔✔What are the two types of depreciation? - ✔✔Curable and icruable
✔✔Which of the following is the best definition of an income-producing property? -
✔✔Real estate that is purchased for investment
✔✔The income Approach to value: - ✔✔Translates the ability of a property to generate
income into an indication of value
✔✔What term describes the use of debt capital to acquire an income-producing asset? -
✔✔Leverage
✔✔Income from property operations before expenses are deducted is referred to as: -
✔✔Effective gross income
✔✔The primary difference between potential grass rent and effective gross rent is: -
✔✔Vacancy and collection losses
✔✔A "normalized" income stream defines - ✔✔Net operating income
✔✔IN appraisal, to "capitalize" means to: - ✔✔convert an income stream into an
indicated value
✔✔Which principal states that the value of property is derived from the future benefits
buyers would expect from the property - ✔✔Anticipation
QUESTIONS SET A+
✔✔An area of complimentary land uses in which all properties are similarly affected by
physical, governmental, social, and economic forces is a - ✔✔Unit of analysis
✔✔Economic forces which have the greatest effect on property values are properties
operating at the level of - ✔✔Locality
✔✔Stability of currency (US dollar trading on world markets) is what type of force? -
✔✔International
✔✔How do you use a sales adjustment grid? - ✔✔Use paired sales analysis to
determine the difference in value between characteristics
✔✔Replacement cost new is the cost to construct: - ✔✔a building to equal quality
✔✔Which of the following is an indirect cost: - ✔✔Engineering fees
✔✔You notice the roof of a single-family residence sags considerably and receive the
owner's permission to inspect the attic. You discover that several rafters are broken. It
would cost $12,500 to repair the roof. Repairs would add $15,000 to the market value of
the property. What kind of depreciation is this? - ✔✔Curable physical short-lived
deterioration
✔✔Which one of the following is an advantage to the cost approach? - ✔✔Can be
applied to virtually any type of property
✔✔Percent good is the percentage of a property's value: - ✔✔that remains after
depreciation
✔✔The economic life of an asset refers to the: - ✔✔number of years over which an
asset is useful
,✔✔Depreciation is best described as - ✔✔A reduction or loss in value from all causes
✔✔Allocation by ratio is a technique for arriving at - ✔✔land value
✔✔Ideally, to build the most accurate schedule for each benchmark property, you
should use the - ✔✔quantity-survey method
✔✔in constructing a cost-schedule, the major effort is given to distinguishing between -
✔✔construction types
✔✔The cost Approach is most effective if the property use is - ✔✔consumptive use
✔✔Cost Approach - ✔✔The process of estimating the value of a property by adding to
the estimated land value the appraiser's estimate of the reproduction or replacement
cost of the building, less depreciation.
✔✔The key concept in replacement cost new is - ✔✔equal utility
✔✔Cost-index trending gives an estimate of - ✔✔Reproduction cost only
✔✔Functional Obsolescence - ✔✔A loss of value to an improvement to real estate
arising from functional problems, often caused by age or poor design.
✔✔Functional obsolescence is curable or incurable because of the relationship between
the cost of repair and the - ✔✔gain in market value after the cure
✔✔The form of depreciation that influences land and improvement value is -
✔✔economic obsolescence
✔✔A Problem inherent in the use of the cost approach to value is it: - ✔✔requires either
market or income approach to value land
✔✔What is the first step in the Cost Approach? - ✔✔Estimate the land (site) value as if
vacant and available for development to its highest and best use
✔✔Which cost method is most often used in Mass Appraisal? - ✔✔Comparative Unit
Method
✔✔What is the formula for land valuation by Allocation by Abstraction? - ✔✔Property
Value - Improvement Value = Land Value
Sale price of property - RCNLD = Land Value
, ✔✔The typical land to property ratio in the area is 1:5. An improved property is
appraised at $150,000. What is the land value? - ✔✔$30,000
✔✔Values in the market for your area are increased at 2% per month. Subject property
sold 4 months before your appraisal date for $100,000. What is the sale price adjusted
for time? - ✔✔$108,000
✔✔Cost schedules typically reflect? - ✔✔Replacement cost new
✔✔Book construction cost index for property constructed in 1982 is 1020.8 and current
cost index for 2022 is 1200.4. Structure cost is $157,500 in 1982. What is the present
reproduction cost new? - ✔✔$184,204
✔✔What is the depreciation (lump sum) of the following property using both the physical
age life and the effective (economic) age/life method? (RCN = $100,000. Actual Age =
10 years. Effective Age = 5 years. Economic Life = 50 years. ) - ✔✔Physical .20
$20,000 and Economic .10 $10,000.
✔✔What are the two types of depreciation? - ✔✔Curable and icruable
✔✔Which of the following is the best definition of an income-producing property? -
✔✔Real estate that is purchased for investment
✔✔The income Approach to value: - ✔✔Translates the ability of a property to generate
income into an indication of value
✔✔What term describes the use of debt capital to acquire an income-producing asset? -
✔✔Leverage
✔✔Income from property operations before expenses are deducted is referred to as: -
✔✔Effective gross income
✔✔The primary difference between potential grass rent and effective gross rent is: -
✔✔Vacancy and collection losses
✔✔A "normalized" income stream defines - ✔✔Net operating income
✔✔IN appraisal, to "capitalize" means to: - ✔✔convert an income stream into an
indicated value
✔✔Which principal states that the value of property is derived from the future benefits
buyers would expect from the property - ✔✔Anticipation
