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What are the three types of Obsolescence? - CORRECT ANSWER-1. Physical
Obsolescence.
2. Functional Obsolescence.
3. Economic Obsolescence.
Operating Expenses - CORRECT ANSWER-all of the costs associated with
running and maintaining a property; in commercial properties, operating
expenses are frequently calculated and referred to on a dollar and cents per
square foot basis ($/SF).
Net Operating Income - CORRECT ANSWER-the money the remains after
Operating Expenses are subtracted from Effective Gross Income.
, Cash Flow - CORRECT ANSWER-the amount of money that remains after Debt
Service is subtracted from Net Operating Income.
Debt Service - CORRECT ANSWER-includes bother interest and principal
reduction and is subtracted from Net Operating Income.
Capital Expenditures - CORRECT ANSWER-- not recurring; typically occur every
5 to 20 years or more.
- involve significant amounts of money.
Depreciation - CORRECT ANSWER-the loss in value from the various forms of
obsolescence.
Market Analysis - CORRECT ANSWER-Identifying the properties strengths and
weaknesses in an effort to improve overall economic performance; also known an
determining the properties highest and best use.
Analysis of Alternatives - CORRECT ANSWER-Identifying theoretical costs
associated with corresponding increases in rent; analyzing the costs associated
with improvements that could increase the overall value of the property.