CCIM EXAM FINAL QUESTIONS AND
CORRECT ANSWERS!
What are the four basic components of NOI?
1 - Potential rental income (PRI)
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.)
Lease analysis
PRI equals NOI in what property/tenant scenario?
If the property has one tenant with a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses.
ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses.
Interest and principal on debt on the property
Depreciation (cost recovery)
Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
True or False: Depreciation is included in Operating Expenses.
False
True of False: Principal and interest on debt financing is included in Operating Expenses
False. This is an expense of ownership, not an operating expense.
True or False: Capital Expenditures are included in Operating Expenses.
CORRECT ANSWERS!
What are the four basic components of NOI?
1 - Potential rental income (PRI)
2 - Vacancy and credit losses
3 - Other income
4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.)
Lease analysis
PRI equals NOI in what property/tenant scenario?
If the property has one tenant with a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses.
ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses.
Interest and principal on debt on the property
Depreciation (cost recovery)
Capital Expenditures
Income Taxes
Reserves for Replacement
Tenant Improvements
True or False: Depreciation is included in Operating Expenses.
False
True of False: Principal and interest on debt financing is included in Operating Expenses
False. This is an expense of ownership, not an operating expense.
True or False: Capital Expenditures are included in Operating Expenses.
