REE 4143 Exam 1 Questions with complete Solutions

Property Tax is included in which of the following? Correct Answer- As part of the data analysis step in the appraisal process, it is necessary to consider the highest and best use of the property in question. In regards to determining the highest and best use, all of the following are true except: Correct Answer- Direct capitalization applies multipliers and rates to: Correct Answer-First year Income Which of the following is NOT an example of the use of direct capitalization? Correct Answer-Using a discount rate Which of the following statements is NOT applicable when using income multipliers to estimate value? Correct Answer-The potential gross income multiplier is more appropriate to use when long-term differences in vacancy between the subject and comparable occur. Which of the following yield capitalization formulas is most applicable when income and value are expected to increase at the same compound rate? Correct Answer-cap rate= discount rate - growth Yield capitalization can be best described as: Correct Answer-estimating the value of a property by discounting the cash flows