REAL 4000 ACTUAL TEST 2 UGA MARTIN

REAL 4000 (ACTUAL / ) TEST 2 (UGA MARTIN)

QUESTIONS AND VERIFIED ANSWERS

hospitality property - -----Answers-----Property classification that includes hotels, motels, and many types of restaurants.

industrial property - -----Answers-----Warehouses, factories, land in industrial districts, and power plants

Internal Rate of Return - -----Answers-----the discount rate that makes the NPV of an investment zero

investment grade properties - -----Answers-----larger, more valuable commercial properties, generally well over $10 million

Investment yield - -----Answers-----The growth in the invested dollars of an investment. Usually stated as a percentage growth or return.

lump sum - -----Answers-----a single payment made at a particular time

multifamily property - -----Answers-----Residential property classification that includes apartments. 1 / 3

Net Present Value - -----Answers-----the present value of current and future benefits minus the present value of current and future costs

Opprotunity Cost - -----Answers-----the most desirable alternative given up as the result of a decision

ordinary annuity - -----Answers-----If the first payment occurs at the end of the period

present value - -----Answers-----the amount of money you would need to deposit now in order to have a desired amount in the future

risk - -----Answers-----The chance of loss from an event that cannot be entirely controlled

Time Value of Money (TVM) - -----Answers-----the concept that money available today is worth more than the same amount tomorrow

Uniform Standards of Professional Appraisal Practice (USPAP)

• -----Answers-----what the appraisal practice is guided by

appraisal basic process - -----Answers-----1. identify the problem 2 / 3

• determine the scope of the work
• collect data and describe
• perform data analysis
• determine value of land
• apply 3 approaches to valuation
• reconcile indicated values from the 3 approaches
• report the final value estimate

identify and define the scope of the problem - -----Answers-- ---who will use the appraisal? what will it be used for? what type of value should be estimated?

collect data and describe property - -----Answers-----must

collect data on: subject property characteristics, market

characteristics, comparable property characteristics, investment market characteristics

perform data analysis and estimate value - -----Answers---- -market analysis and highest and best use

highest and best use as though vacant - -----Answers----- ignores existing improvements

highest and best use as improved - -----Answers-----takes into account the cost of converting from existing use to a different one

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