REE CHAPTER 8 TEST QUESTIONS
WITH REVISED ANSWERS
Which of the following statements best describes a "step-up" lease?
Multiple choice question.
Rental rates increase at predetermined rates at predetermined times
Rental rates increase based on the rate of general inflation in the economy
Tenants pay an increasing share of building-level operating expenses over time -
Answer-Rental rates increase at predetermined rates at predetermined times
Capital expenditures generally
Multiple choice question.
occur at regular intervals
have no impact on the value of the property
prolong the economic life of the structure - Answer-prolong the economic life of the
structure
The appraiser would only forecast renal income that is "loss to lease"
Multiple choice question.
if market rental rates for some of the space in the property are below the contract rental
rates being paid by tenants
if market rental rates for some of the space in the property are above the contract rental
rates being paid by tenants
if some of the space in the property is excepted to be vacant - Answer-if market rental
rates for some of the space in the property are above the contract rental rates being
paid by tenants
When analyzing the operating expenses of a small office building, which of the following
is a relatively fixed operating expense?
Multiple choice question.
Management expense
Heating and air conditioning expenses
Hazard and fire insurance premium
Monthly mortgage payment - Answer-Hazard and fire insurance premium
Appraiser are more likely to estimate actual capital expenditures in the period (year)
they are expected to be incurred if the appraiser is using ____________ to estimate
value.
Multiple choice question.
a direct capitalization model
a discounted cash flow model
a deferred maintenance model
a residual valuation model - Answer-a discounted cash flow model
WITH REVISED ANSWERS
Which of the following statements best describes a "step-up" lease?
Multiple choice question.
Rental rates increase at predetermined rates at predetermined times
Rental rates increase based on the rate of general inflation in the economy
Tenants pay an increasing share of building-level operating expenses over time -
Answer-Rental rates increase at predetermined rates at predetermined times
Capital expenditures generally
Multiple choice question.
occur at regular intervals
have no impact on the value of the property
prolong the economic life of the structure - Answer-prolong the economic life of the
structure
The appraiser would only forecast renal income that is "loss to lease"
Multiple choice question.
if market rental rates for some of the space in the property are below the contract rental
rates being paid by tenants
if market rental rates for some of the space in the property are above the contract rental
rates being paid by tenants
if some of the space in the property is excepted to be vacant - Answer-if market rental
rates for some of the space in the property are above the contract rental rates being
paid by tenants
When analyzing the operating expenses of a small office building, which of the following
is a relatively fixed operating expense?
Multiple choice question.
Management expense
Heating and air conditioning expenses
Hazard and fire insurance premium
Monthly mortgage payment - Answer-Hazard and fire insurance premium
Appraiser are more likely to estimate actual capital expenditures in the period (year)
they are expected to be incurred if the appraiser is using ____________ to estimate
value.
Multiple choice question.
a direct capitalization model
a discounted cash flow model
a deferred maintenance model
a residual valuation model - Answer-a discounted cash flow model
