IAAO 102 Chapter 5 Review questions with
| | | | | | |
correct answers |
If |the |land |capitalization |rate |in |straight |line |capitalization |(including |the |effective |tax |rate) |is |
9%, |and |the |remaining |economic |life |of |the |improvement |is |25 |years, |the |building |
capitalization |rate |is |- |correct |answer |13% |.
In |straight-line |capitalization, |________________________is |received |in |equal |amounts |during
|the |economic |life |of |the |improvement. |- |correct |answer |recapture
Straight-line |capitalization |assumes |a |______________________income |stream |during |the |
remaining |economic |life |of |the |improvements. |- |correct |answer |declining
Straight-line |capitalization |is |best |utilized |when |the |property |has: |- |correct |answer |1. |Income |is
|expected |to |decline |over |the |remaining |economic |life |
2. |Discount |(or |overall |yield) |is |earned |on |nondepreciated |balance |of |investment |
3. |Recapture |is |received |in |equal |amounts |during |remaining |life |of |improvements
The |building |residual |technique |should |be |used |when: |- |correct |answer |1. |Land |value |
supported |by |market |data |is |known |
2. |Improvement |is |not |new |
3. |Improvement |is |not |adequate |for |site |
4. |Vacant |land |sales |are |available
The |land |residual |technique |should |be |used |when: |- |correct |answer |1. |Improvements |are |
adequate |in |condition |and |suitability |to |the |site |
2. |Land |consists |of |a |large |parcel |with |no |comparable |property |available |
3. |Land |sales |are |not |available |
4. |Building |is |new, |and |the |proper |use |and |cost |are |known
| | | | | | |
correct answers |
If |the |land |capitalization |rate |in |straight |line |capitalization |(including |the |effective |tax |rate) |is |
9%, |and |the |remaining |economic |life |of |the |improvement |is |25 |years, |the |building |
capitalization |rate |is |- |correct |answer |13% |.
In |straight-line |capitalization, |________________________is |received |in |equal |amounts |during
|the |economic |life |of |the |improvement. |- |correct |answer |recapture
Straight-line |capitalization |assumes |a |______________________income |stream |during |the |
remaining |economic |life |of |the |improvements. |- |correct |answer |declining
Straight-line |capitalization |is |best |utilized |when |the |property |has: |- |correct |answer |1. |Income |is
|expected |to |decline |over |the |remaining |economic |life |
2. |Discount |(or |overall |yield) |is |earned |on |nondepreciated |balance |of |investment |
3. |Recapture |is |received |in |equal |amounts |during |remaining |life |of |improvements
The |building |residual |technique |should |be |used |when: |- |correct |answer |1. |Land |value |
supported |by |market |data |is |known |
2. |Improvement |is |not |new |
3. |Improvement |is |not |adequate |for |site |
4. |Vacant |land |sales |are |available
The |land |residual |technique |should |be |used |when: |- |correct |answer |1. |Improvements |are |
adequate |in |condition |and |suitability |to |the |site |
2. |Land |consists |of |a |large |parcel |with |no |comparable |property |available |
3. |Land |sales |are |not |available |
4. |Building |is |new, |and |the |proper |use |and |cost |are |known