Argus Certification Exam | 200 Questions with 100%
Correct Answers | Verified | Latest Update | 2025
Question 1
Which of the following is the primary purpose of ARGUS Enterprise (AE) in
commercial real estate?
A) To manage property maintenance schedules.
B) To analyze and value real estate investments.
C) To track tenant demographics.
D) To process property tax payments.
E) To manage construction projects.
Correct Answer: B) To analyze and value real estate investments.
Rationale: ARGUS Enterprise is a widely used software platform for
financial modeling, valuation, and analysis of commercial real estate
properties and portfolios.
Question 2
In AE, what is the significance of the "Valuation" tab?
A) It is where operating expenses are input.
B) It defines the tenant lease terms.
C) It allows for the input of sale assumptions (e.g., Cap Rate, Residual Value)
and calculates the Terminal Value.
D) It tracks historical property performance.
E) It manages debt financing details.
Correct Answer: C) It allows for the input of sale assumptions (e.g.,
Cap Rate, Residual Value) and calculates the Terminal Value.
Rationale: The Valuation tab is crucial for determining the property's
terminal (resale) value at the end of the holding period, using either
a Cap Rate or a specified Residual Value growth rate, and calculates
the overall property value.
Question 3
Which of the following best describes "Net Present Value" (NPV) in real estate
valuation?
,A) The total income generated by a property over its lifetime.
B) The current value of a future stream of cash flows, discounted at a specific
rate.
C) The annual return on an investment.
D) The initial cost of an investment.
E) The value of the property at the end of the holding period.
Correct Answer: B) The current value of a future stream of cash flows,
discounted at a specific rate.
Rationale: NPV is a capital budgeting method that calculates the
difference between the present value of future cash inflows and the
initial cost of an investment. A positive NPV generally indicates a
desirable investment.
Question 4
In AE, where would you typically input assumptions for "Tenant
Improvements" (TIs)?
A) The Operating Expenses tab.
B) The Capital Expenditures tab.
C) The Market Leasing tab (for rollover leases) or the Lease Details tab (for
initial leases).
D) The Valuation tab.
E) The Debt tab.
Correct Answer: C) The Market Leasing tab (for rollover leases) or the
Lease Details tab (for initial leases).
Rationale: Tenant Improvements are typically associated with new
leases or renewals. In AE, TIs are entered either within the Market
Leasing Assumptions (which apply to rollover tenants) or directly
within the individual Lease Details for specific tenants.
Question 5
What does "Cash Flow Before Tax" (CFBT) represent in an AE analysis?
A) The net operating income (NOI) after all expenses.
,B) The net income after all expenses, including debt service, but before
taxes.
C) The property's revenue before any expenses.
D) The total amount of cash available for distribution to investors.
E) The sale price of the property.
Correct Answer: B) The net income after all expenses, including debt
service, but before taxes.
Rationale: CFBT is a key metric showing the cash generated by the
property after deducting operating expenses and debt service
(principal and interest payments), but before accounting for income
taxes.
Question 6
When valuing an income-producing property using the "Direct Capitalization"
method, what is the formula?
A) Net Operating Income / Capitalization Rate
B) Net Operating Income x Capitalization Rate
C) Gross Potential Revenue / Capitalization Rate
D) Sales Price / Net Operating Income
E) Equity / Capitalization Rate
Correct Answer: A) Net Operating Income / Capitalization Rate
Rationale: Direct Capitalization is a valuation technique that converts
a property's Net Operating Income (NOI) for a single year into a
value estimate by dividing it by a market-derived capitalization rate
(Cap Rate).
Question 7
In AE, where are assumptions for "Leasing Commissions" (LCs) typically
entered?
A) The Capital Expenditures tab.
B) The Operating Expenses tab.
C) The Market Leasing tab (for rollover leases) or the Lease Details tab (for
, initial leases).
D) The Valuation tab.
E) The Debt tab.
Correct Answer: C) The Market Leasing tab (for rollover leases) or the
Lease Details tab (for initial leases).
Rationale: Leasing Commissions, like Tenant Improvements, are
associated with securing new tenants or renewing existing ones.
They are input within the Market Leasing Assumptions or directly
into individual Lease Details.
Question 8
What is the purpose of the "Inflation" tab in AE?
A) To adjust market rent growth rates only.
B) To set general inflation rates for various categories such as expenses,
market rents, and capital expenditures.
C) To track historical inflation data.
D) To only apply inflation to current tenant leases.
E) To calculate the Consumer Price Index (CPI).
Correct Answer: B) To set general inflation rates for various categories
such as expenses, market rents, and capital expenditures.
Rationale: The Inflation tab allows users to define various inflation
rates that AE will apply to different categories (e.g., operating
expenses, capital expenditures, market rents) over the projection
period, reflecting anticipated economic changes.
Question 9
Which of the following is a "fixed operating expense" for a commercial
property?
A) Management fees (as a percentage of revenue).
B) Real estate taxes.
C) Utilities (based on consumption).
D) Repairs (based on usage).
Correct Answers | Verified | Latest Update | 2025
Question 1
Which of the following is the primary purpose of ARGUS Enterprise (AE) in
commercial real estate?
A) To manage property maintenance schedules.
B) To analyze and value real estate investments.
C) To track tenant demographics.
D) To process property tax payments.
E) To manage construction projects.
Correct Answer: B) To analyze and value real estate investments.
Rationale: ARGUS Enterprise is a widely used software platform for
financial modeling, valuation, and analysis of commercial real estate
properties and portfolios.
Question 2
In AE, what is the significance of the "Valuation" tab?
A) It is where operating expenses are input.
B) It defines the tenant lease terms.
C) It allows for the input of sale assumptions (e.g., Cap Rate, Residual Value)
and calculates the Terminal Value.
D) It tracks historical property performance.
E) It manages debt financing details.
Correct Answer: C) It allows for the input of sale assumptions (e.g.,
Cap Rate, Residual Value) and calculates the Terminal Value.
Rationale: The Valuation tab is crucial for determining the property's
terminal (resale) value at the end of the holding period, using either
a Cap Rate or a specified Residual Value growth rate, and calculates
the overall property value.
Question 3
Which of the following best describes "Net Present Value" (NPV) in real estate
valuation?
,A) The total income generated by a property over its lifetime.
B) The current value of a future stream of cash flows, discounted at a specific
rate.
C) The annual return on an investment.
D) The initial cost of an investment.
E) The value of the property at the end of the holding period.
Correct Answer: B) The current value of a future stream of cash flows,
discounted at a specific rate.
Rationale: NPV is a capital budgeting method that calculates the
difference between the present value of future cash inflows and the
initial cost of an investment. A positive NPV generally indicates a
desirable investment.
Question 4
In AE, where would you typically input assumptions for "Tenant
Improvements" (TIs)?
A) The Operating Expenses tab.
B) The Capital Expenditures tab.
C) The Market Leasing tab (for rollover leases) or the Lease Details tab (for
initial leases).
D) The Valuation tab.
E) The Debt tab.
Correct Answer: C) The Market Leasing tab (for rollover leases) or the
Lease Details tab (for initial leases).
Rationale: Tenant Improvements are typically associated with new
leases or renewals. In AE, TIs are entered either within the Market
Leasing Assumptions (which apply to rollover tenants) or directly
within the individual Lease Details for specific tenants.
Question 5
What does "Cash Flow Before Tax" (CFBT) represent in an AE analysis?
A) The net operating income (NOI) after all expenses.
,B) The net income after all expenses, including debt service, but before
taxes.
C) The property's revenue before any expenses.
D) The total amount of cash available for distribution to investors.
E) The sale price of the property.
Correct Answer: B) The net income after all expenses, including debt
service, but before taxes.
Rationale: CFBT is a key metric showing the cash generated by the
property after deducting operating expenses and debt service
(principal and interest payments), but before accounting for income
taxes.
Question 6
When valuing an income-producing property using the "Direct Capitalization"
method, what is the formula?
A) Net Operating Income / Capitalization Rate
B) Net Operating Income x Capitalization Rate
C) Gross Potential Revenue / Capitalization Rate
D) Sales Price / Net Operating Income
E) Equity / Capitalization Rate
Correct Answer: A) Net Operating Income / Capitalization Rate
Rationale: Direct Capitalization is a valuation technique that converts
a property's Net Operating Income (NOI) for a single year into a
value estimate by dividing it by a market-derived capitalization rate
(Cap Rate).
Question 7
In AE, where are assumptions for "Leasing Commissions" (LCs) typically
entered?
A) The Capital Expenditures tab.
B) The Operating Expenses tab.
C) The Market Leasing tab (for rollover leases) or the Lease Details tab (for
, initial leases).
D) The Valuation tab.
E) The Debt tab.
Correct Answer: C) The Market Leasing tab (for rollover leases) or the
Lease Details tab (for initial leases).
Rationale: Leasing Commissions, like Tenant Improvements, are
associated with securing new tenants or renewing existing ones.
They are input within the Market Leasing Assumptions or directly
into individual Lease Details.
Question 8
What is the purpose of the "Inflation" tab in AE?
A) To adjust market rent growth rates only.
B) To set general inflation rates for various categories such as expenses,
market rents, and capital expenditures.
C) To track historical inflation data.
D) To only apply inflation to current tenant leases.
E) To calculate the Consumer Price Index (CPI).
Correct Answer: B) To set general inflation rates for various categories
such as expenses, market rents, and capital expenditures.
Rationale: The Inflation tab allows users to define various inflation
rates that AE will apply to different categories (e.g., operating
expenses, capital expenditures, market rents) over the projection
period, reflecting anticipated economic changes.
Question 9
Which of the following is a "fixed operating expense" for a commercial
property?
A) Management fees (as a percentage of revenue).
B) Real estate taxes.
C) Utilities (based on consumption).
D) Repairs (based on usage).
