Appraisal Cost And Income Approaches Frequently Tested Actual Exam Questions With Correct Answers

APPRAISAL COST AND INCOME APPROACHES
FREQUENTLY TESTED ACTUAL EXAM QUESTIONS WITH
CORRECT ANSWERS

Question 1.
Which represents the cost approach to appraisal?
A. Replacement cost minus depreciation plus land value
B. Replacement cost minus depreciation minus land value
C. Reproduction cost plus depreciation plus land value D. Reproduction cost plus depreciation minus
land value

ANSWER
A. Replacement cost minus depreciation plus land value



Question 2.
An agent evaluating a residential property for a listing presentation would MOST likely use:
A. direct sales comparison approach
B. replacement cost approach
C. cost approach
D. income approach

ANSWER

A. direct sales comparison approach



Question 3.
The greatest weight would be given to the cost approach when appraising a(an):
A. apartment building
B. church
C. old residence
D. old commercial building

ANSWER
B. church




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, Question 4.
In preparing an estimate of value for a 30-year old house, an appraiser will MOST likely use which of
the following approaches to value?
A. Replacement cost
B. Reproduction cost
C. Market data
D. Income

ANSWER

C. Market data



Question 5.
The appraisal approach which uses the replacement cost less depreciation, added to the land value is:
A. market data
B. cost
C. income
D. capitalization

ANSWER
B. cost



Question 6.
An appraiser would MOST likely use the market data approach in estimating the value of a(an):
A. oil refinery
B. gas station
C. municipal building
D. parcel of vacant land

ANSWER
D. parcel of vacant land



Question 7.
Which of the three appraisal approaches takes into account depreciation?
A. Cost
B. Income
C. Market
D. Highest and best use

ANSWER

A. Cost




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