CMI Exam 2026 with all Correct & 100% Verified Answers
|Actual Complete Exam |Already Graded A+
abatement ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-the rental rate on a per-room basis for a hotel or other
short term hostelry
band of investment method ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-the conversion of a non-cash consideration or non-market
financial term into value that is stated in dollars
cash flows ✔Correct Answer-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 ✔Correct Answer-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
classified state ✔Correct Answer-different property types can have different ratios
non-classified state ✔Correct Answer-all property is assessed at the same ratio
coefficient of dispersion ✔Correct Answer-a statistical measure that examines the level of
uniformity with the individual of assessment of real property. It measures the percentage
deviation from the median ratio. The smaller the coefficient of dispersion, the closer the
individual ratios are. The median ratio and is more indicative of a consistent level of assessment.
Whereas a larger coefficient of dispersion indicates a less consistent level of assessment
- for residential property 15% or less is good
- for commercial property 20% or less is good
comparable sales ✔Correct Answer-a shortened term for similar property sales, rentals or
operating expenses used for comparison in the valuation process
comparative unit method ✔Correct Answer-a method used to estimate the value of real
property in terms of dollars per unit of area or volume based on known costs of similar
structures that are adjusted for time and physical differences, usually applied to the total
building area. This method provides the least amount of detail in the 3 methods of using cost
approach and is commonly used in the property tax field. Easier to use because data is more
readily available.
components of asset cost ✔Correct Answer-the individual components that comprise the
total cost for a piece of equipment or property. The components can be taxable or non-taxable.
, - Personal Property: components include cost of equipment, freight, installation, sales tax,
special foundation needed, engineering, warranties, etc
- Real Property: components include land, construction costs, legal fees, architect fees, site
preparation costs, financing costs, commission fees, etc
consigned goods ✔Correct Answer-merchandise that is for sale that is not owned by the
seller. Upon the sale, the seller will remit an agreed upon percentage of the sales price to the
owner
contract rent ✔Correct Answer-the rent amount that is specified in the lease between the
lessor and lessee. Use of contract rent implies a "leased fee" appraisal
principle of contribution ✔Correct Answer-the concept that the value of a component part of
a property depends on how much it contributes to the value of a property as a whole
cost approach ✔Correct Answer-one of 3 principles to value for personal & real property.
Assumes a buyer would pay no more than the cost of constructing an acceptable substitute.
Relies on the principle of substitution. Majority of taxing jurisdictions concentrate on the this
approach and some only use the this approach. Calculated as follows:
Cost of construction
- depreciation
+ Land Value
+ Entrepreneurial profit
= Indicated value
cost of goods ✔Correct Answer-the cost of goods sold in the ordinary course of business
debt service ✔Correct Answer-the periodic payment that covers interest on and retirement of
the outstanding principal of the mortgage loan. The monthly or annual payment on borrowed
funs
depreciation ✔Correct Answer-the difference between the market value of an improvement
and its reproduction or replacement (cost new). It generally refers to loss in value. The various
methods of depreciation are: straight line, declining balance, sum of the year's digits, service
hours & units of output
depth factor ✔Correct Answer-a factor or percentage that represents the relative value of a
lot of given depth as compared to the value of a lot of standard depth
depth table ✔Correct Answer-a table of depth factors showing the estimated percentage
relationship between the front foot value of a lot of a given depth and the front foot value of a
lot of standard depth
|Actual Complete Exam |Already Graded A+
abatement ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-the rental rate on a per-room basis for a hotel or other
short term hostelry
band of investment method ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-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 ✔Correct Answer-the conversion of a non-cash consideration or non-market
financial term into value that is stated in dollars
cash flows ✔Correct Answer-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 ✔Correct Answer-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
classified state ✔Correct Answer-different property types can have different ratios
non-classified state ✔Correct Answer-all property is assessed at the same ratio
coefficient of dispersion ✔Correct Answer-a statistical measure that examines the level of
uniformity with the individual of assessment of real property. It measures the percentage
deviation from the median ratio. The smaller the coefficient of dispersion, the closer the
individual ratios are. The median ratio and is more indicative of a consistent level of assessment.
Whereas a larger coefficient of dispersion indicates a less consistent level of assessment
- for residential property 15% or less is good
- for commercial property 20% or less is good
comparable sales ✔Correct Answer-a shortened term for similar property sales, rentals or
operating expenses used for comparison in the valuation process
comparative unit method ✔Correct Answer-a method used to estimate the value of real
property in terms of dollars per unit of area or volume based on known costs of similar
structures that are adjusted for time and physical differences, usually applied to the total
building area. This method provides the least amount of detail in the 3 methods of using cost
approach and is commonly used in the property tax field. Easier to use because data is more
readily available.
components of asset cost ✔Correct Answer-the individual components that comprise the
total cost for a piece of equipment or property. The components can be taxable or non-taxable.
, - Personal Property: components include cost of equipment, freight, installation, sales tax,
special foundation needed, engineering, warranties, etc
- Real Property: components include land, construction costs, legal fees, architect fees, site
preparation costs, financing costs, commission fees, etc
consigned goods ✔Correct Answer-merchandise that is for sale that is not owned by the
seller. Upon the sale, the seller will remit an agreed upon percentage of the sales price to the
owner
contract rent ✔Correct Answer-the rent amount that is specified in the lease between the
lessor and lessee. Use of contract rent implies a "leased fee" appraisal
principle of contribution ✔Correct Answer-the concept that the value of a component part of
a property depends on how much it contributes to the value of a property as a whole
cost approach ✔Correct Answer-one of 3 principles to value for personal & real property.
Assumes a buyer would pay no more than the cost of constructing an acceptable substitute.
Relies on the principle of substitution. Majority of taxing jurisdictions concentrate on the this
approach and some only use the this approach. Calculated as follows:
Cost of construction
- depreciation
+ Land Value
+ Entrepreneurial profit
= Indicated value
cost of goods ✔Correct Answer-the cost of goods sold in the ordinary course of business
debt service ✔Correct Answer-the periodic payment that covers interest on and retirement of
the outstanding principal of the mortgage loan. The monthly or annual payment on borrowed
funs
depreciation ✔Correct Answer-the difference between the market value of an improvement
and its reproduction or replacement (cost new). It generally refers to loss in value. The various
methods of depreciation are: straight line, declining balance, sum of the year's digits, service
hours & units of output
depth factor ✔Correct Answer-a factor or percentage that represents the relative value of a
lot of given depth as compared to the value of a lot of standard depth
depth table ✔Correct Answer-a table of depth factors showing the estimated percentage
relationship between the front foot value of a lot of a given depth and the front foot value of a
lot of standard depth
