Multiple choice questions on plant assets, natural resources, and intangibles.
1. An analysis of a recent sale of five building sites revealed a quantity discount of 33%. How much should the selling price be multiplied by in order to determine the selling price without the discount?
a.0.33
b.0.67
c.1.33
d.1.50
2. Which sale had an above market lease to a credit tenant?
a.Sale 1
b.Sale 2
c.Sale 3
d.Sale 4
3. Which sale had vacant space needing new tenant improvements at time of sale?
a.Sale 1
b.Sale 2
c.Sale 3
d.Sale 4
4. Which sale cannot be used to bracket the value of the subject property using qualitative adjustments?
a.Sale 1
b.Sale 2
c.Sale 3
d.Sale 4
5. The following residential lot sales are similar except for the information summarized below.
|
Sale No.
|
Size (acres)
|
Sale Price
|
Price/acre
|
Gated?
|
Horses Allowed?
|
|
1
|
0.5
|
$100,000
|
$200,000
|
No
|
Yes
|
|
2
|
0.65
|
$162,500
|
$250,000
|
Yes
|
No
|
|
3
|
0.8
|
$170,000
|
$212,500
|
Yes
|
Yes
|
|
4
|
1.1
|
$264,000
|
$240,000
|
No
|
No
|
|
5
|
1.5
|
$337,000
|
$225,000
|
No
|
No
|
|
6
|
1.9
|
$425,000
|
$223,684
|
No
|
Yes
|
|
7
|
2.2
|
$514,000
|
$234,000
|
Yes
|
Yes
|
|
8
|
2.5
|
$530,000
|
$212,000
|
No
|
No
|
|
9
|
2.8
|
$588,000
|
$210,000
|
Yes
|
No
|
|
10
|
3.1
|
$744,000
|
$240,000
|
No
|
Yes
|
|
11
|
3.2
|
$640,000
|
$200,000
|
No
|
No
|
The subject property is a 2.6 acre parcel, in an un-gated community that permits horses. What is the market value per acre?
a.Less than $215,000
b.$215,000 to $224,999
c.$225,000 to $244,999
d.$245,000 or more
6. The subject property is a 20-acre vacant land parcel ten miles from the edge of a rapidly growing city. The highest and best use is to hold for future development while dry farming it on an interim basis. An almost identical 20-acre property sold recently for $10,000 per acre, with 20% down and monthly-payment seller financing at 8%, with a 30-year amortization due in 7 years.
This is the typical form of financing for all the comparable sales in this market. There are no sales that do not involve substantial seller financing. During the sale's confirmation interviews, both buyer and seller estimated that if the sale had been all cash, the price would have been $20,000 less.
Institutional financing is not available for this type of property, nor is there a secondary market for the seller paper. However, institutional financing is available as follows:
|
Property
|
Rate
|
Terms (all have monthly payments)
|
|
Single family residential
|
7.50%
|
30 year fully amortized due in 7 years
|
|
Commercial city lot
|
9.50%
|
10 year amortization due in 2 years
|
|
Immediately developable residential acreage (10 to 200) acres)
|
10.00%
|
Up to 5 years interest only, due as individual lots are sold to builders
|
|
Irrigated cropland agricultural loans
|
9.00%
|
Interest only, due within a year
|
What is the cash-equivalence adjustment for the sale?
a.+$4,200
b.Zero
c.-$8,000 to -$15,600
d.20,000
7. Two percentage adjustments are necessary to a comparable sale, Under what circumstance should the percentages be added, rather than multiplied, in the adjustment process?
a.ver
b.en the matched pairs technique was used
c.en both adjustments were based on the selling price
c.en the second adjustment was estimated after consideration or the first adjustment.
8. A five year old resort non-franchise hotel is under contract for $65,000 per unit. If constructed today, the cost of the land, hard costs, soft costs, entrepreneurial incentive to construct, and personal property would total $58,000 per unit. What explains the difference between the contract price and the actual cost to create?
a.&E
b.siness
c.cation
d.owledge of the parties
9. The appraised property is located in a neighborhood experiencing a change from residential to office land use. Several 10,000 to 20,000 square food vacant, unimproved lots have sold for around $4.00 per square foot. Two old houses near the appraised property have recently been demolished at a cost of $2,500 each. The land was then paved at a cost of $1.50 per square food and converted to a surface parking lot. The subject property consists of a 10,000 square foot lot improved with an old, dilapidated house and 7,500 square feet of good pavement. What is the current market value of the appraised property?
a.ss than $40,000
b.,000 to $44,999
c.5,000 to $49,999
d.0,000 or more
10. What is the most that the owner of the four lots can afford to pay for the 10 foot easement across Lot A?
a.0,000
b.20,000
c.25,000
d.00,000