CMI Exam – Comprehensive Practice Questions &
Verified Answers | Complete Certification Exam
Review & Preparation | 2026–2027
, abatement an incentive used by local taxing jurisdictions to entice companies to expand
operations or relocate to their jurisdiction by offering to reduce the full amount of
property taxes paid over a period of years by an agreed upon percentage; provided
minimum spending thresholds are met
actual age the number of years that have passed since the asset was acquired or constructed
(AKA: the historical age and/or chronological age)
age-life method a method used to estimate total depreciation using the cost approach, this method
does not allocate depreciation among its components (physical, functional, external)
agricultural use method a valuation methodology used by a number of jurisdictions where land user for valid
agricultural purposes is valued using more favorable assessment ratio than non-
agricultural land. an estimate of value is based solely on on the property's
agricultural ability
principle of anticipation a principle that is based on the present use of future income, along with the
perception that value is created by the expectation of benefits in the future. one of
the principles that influence value
assessment level the percentage of the properties market value that is subject to taxation. For
example in CA the assessment level is 100% and in GA it's 40%
average daily rate the rental rate on a per-room basis for a hotel or other short term hostelry
band of investment method a technique in which capitalization rates attributable to components of a capital
investment are weighted and combined to derive a weighted average rate
attributable to the total investment.
building residual technique a valuation technique where the land values is known, along with the building and
land capitalization rate and NOI. We would estimate the income attribution to the
land once the income to the land is calculated. We determine the income to the
building and calculate the value of the building
capital asset pricing model a model of relationships between expected risks and expected return. The model is
grounded in the theory that investors demand higher returns for greater risks. It
says that the return on an asset or a security is equal to the risk-free return, such as
the return on a short term treasury security plus a risk premium
capitalization rate any rate used to convert income to value. A ratio that expresses a relationship
between income and value. The rate includes annual capital recovery in addition to
interest components, it can also include an effective tax rate
cash equivalency the conversion of a non-cash consideration or non-market financial term into value
that is stated in dollars
cash flows the periodic or total income attributable to a business activity or property rental.
cash flows are used to calculate on indicated value via the DCF method
-the remaining positive or negative amount of income an investment produces after
subtracting all operating expenses and debt service from the gross income
classification of property the description of property based on its class for assessment purposes. As a result,
it may result in different tax rates and assessment ratios for different types of
property
Verified Answers | Complete Certification Exam
Review & Preparation | 2026–2027
, abatement an incentive used by local taxing jurisdictions to entice companies to expand
operations or relocate to their jurisdiction by offering to reduce the full amount of
property taxes paid over a period of years by an agreed upon percentage; provided
minimum spending thresholds are met
actual age the number of years that have passed since the asset was acquired or constructed
(AKA: the historical age and/or chronological age)
age-life method a method used to estimate total depreciation using the cost approach, this method
does not allocate depreciation among its components (physical, functional, external)
agricultural use method a valuation methodology used by a number of jurisdictions where land user for valid
agricultural purposes is valued using more favorable assessment ratio than non-
agricultural land. an estimate of value is based solely on on the property's
agricultural ability
principle of anticipation a principle that is based on the present use of future income, along with the
perception that value is created by the expectation of benefits in the future. one of
the principles that influence value
assessment level the percentage of the properties market value that is subject to taxation. For
example in CA the assessment level is 100% and in GA it's 40%
average daily rate the rental rate on a per-room basis for a hotel or other short term hostelry
band of investment method a technique in which capitalization rates attributable to components of a capital
investment are weighted and combined to derive a weighted average rate
attributable to the total investment.
building residual technique a valuation technique where the land values is known, along with the building and
land capitalization rate and NOI. We would estimate the income attribution to the
land once the income to the land is calculated. We determine the income to the
building and calculate the value of the building
capital asset pricing model a model of relationships between expected risks and expected return. The model is
grounded in the theory that investors demand higher returns for greater risks. It
says that the return on an asset or a security is equal to the risk-free return, such as
the return on a short term treasury security plus a risk premium
capitalization rate any rate used to convert income to value. A ratio that expresses a relationship
between income and value. The rate includes annual capital recovery in addition to
interest components, it can also include an effective tax rate
cash equivalency the conversion of a non-cash consideration or non-market financial term into value
that is stated in dollars
cash flows the periodic or total income attributable to a business activity or property rental.
cash flows are used to calculate on indicated value via the DCF method
-the remaining positive or negative amount of income an investment produces after
subtracting all operating expenses and debt service from the gross income
classification of property the description of property based on its class for assessment purposes. As a result,
it may result in different tax rates and assessment ratios for different types of
property
