FIN 306 FINAL EXAM |QUESTIONS & ANSWERS VERIFIED
SOLUTIONS 100%|GRADE A+|LATEST 2024/2025
Accrued depreciation is the difference between the current market value of a
building and the total cost to reproduce it new. One reason for this difference is
related to changes in tastes, preferences, technical innovations, or market
standards. This is commonly referred to as
a) physical deterioration
b) functional obsolescence
c) tax depreciation
d) external obsolescence - ✔✔Functional Obsolescence
When employing the sales comparison approach, appraisers must consider
numerous adjustments to convert each comparable sale transaction into an
approximation of the subject property. Adjustments are divided into two groups:
transactional adjustments and property adjustments. All of the following are
transactional adjustments except
a) location
b) market conditions
c) financing terms
d) conditions of sale - ✔✔Location
Several techniques can be used to obtain an indication of land value. The cost
approach to valuation would most likely be used for which of the following
properties?
a) retail office space
b) one-family residential property
c) high-rise apartments
, d) education facility - ✔✔Education Facility
It may be appropriate for a real estate professional to use different approaches for
estimating the market value of a property depending upon the particular property
type and use. Which of the following approaches would be most applicable when
considering the valuation of retail office space (i.e., which approach would receive
the most weight in the valuation process)?
a) investment approach
b) sales comparison approach
c) income approach
d) cost approach - ✔✔Income Approach
Which of the following would be categorized as a cause of external obsolescence?
a) increased traffic flow due to more intensive use in the local area
b) outdated fixtures
c) lack of adequate insulation
d) deterioration of indoor carpets - ✔✔increased traffic flow due to more intensive
use in the local area
Which of the following measures is considered the fundamental determinant of
market value for income-producing properties?
a) capital expenditures
b) net operating income
c) potential gross income
d) operating expenses - ✔✔Net operating income
SOLUTIONS 100%|GRADE A+|LATEST 2024/2025
Accrued depreciation is the difference between the current market value of a
building and the total cost to reproduce it new. One reason for this difference is
related to changes in tastes, preferences, technical innovations, or market
standards. This is commonly referred to as
a) physical deterioration
b) functional obsolescence
c) tax depreciation
d) external obsolescence - ✔✔Functional Obsolescence
When employing the sales comparison approach, appraisers must consider
numerous adjustments to convert each comparable sale transaction into an
approximation of the subject property. Adjustments are divided into two groups:
transactional adjustments and property adjustments. All of the following are
transactional adjustments except
a) location
b) market conditions
c) financing terms
d) conditions of sale - ✔✔Location
Several techniques can be used to obtain an indication of land value. The cost
approach to valuation would most likely be used for which of the following
properties?
a) retail office space
b) one-family residential property
c) high-rise apartments
, d) education facility - ✔✔Education Facility
It may be appropriate for a real estate professional to use different approaches for
estimating the market value of a property depending upon the particular property
type and use. Which of the following approaches would be most applicable when
considering the valuation of retail office space (i.e., which approach would receive
the most weight in the valuation process)?
a) investment approach
b) sales comparison approach
c) income approach
d) cost approach - ✔✔Income Approach
Which of the following would be categorized as a cause of external obsolescence?
a) increased traffic flow due to more intensive use in the local area
b) outdated fixtures
c) lack of adequate insulation
d) deterioration of indoor carpets - ✔✔increased traffic flow due to more intensive
use in the local area
Which of the following measures is considered the fundamental determinant of
market value for income-producing properties?
a) capital expenditures
b) net operating income
c) potential gross income
d) operating expenses - ✔✔Net operating income
