IA Module 1 to 5

Which of the following is an important reason for considering market value when applying the income capitalization approach

• to evaluate the applicability of the income approach
• to differentiate it from most probable selling price
• to contrast it with investment value
• to equate it to value in use
• See Module 1 page Market Value for more information.

Every economic principle relates to the process of

• converting value into more value.
• converting value into income.
• converting income into acquisitions.
• converting income into value.
• See Module 1 page Anticipation and Other Relevant Economic Principles for more information

A small retail property has a net operating income of $250,000 and the appropriate capitalization rate is 8%. What are the values associated with each variable?

• I = $250,000, R = 0.08
• R = $250,000, I = 0.08
• V = $250,000, I = 0.08
• I = $250,000, Y = 0.08
• See Module 1 page Two Methods of Capitalization: Direct Capitalization for more information.

A small retail property has a net operating income of $250,000 and the appropriate capitalization rate is 8%. What is the formula that should be used in this problem?

• I / R =V
• V / I =R
• V / Y =R
• R × I = V
• See Module 1 page Two Methods of Capitalization: Direct Capitalization for more information.

A small retail property has a net operating income of $250,000 and the appropriate capitalization rate is 8%. What is the symbol for which we are solving?

• Y
• V
• I
• R
• See Module 1 page Two Methods of Capitalization: Direct Capitalization for more information.

A small retail property has a net operating income of $250,000 and the appropriate capitalization rate is 8%. What is the value of the property?

• 3125000
• 2000000
• 250000
• 500000
• See Module 1 page Two Methods of Capitalization: Direct Capitalization for more information.

All cap rates are abbreviated with which of the following letters?

• C
• O
• Y
• R
• See Module 1 page What is Capitalization? for more information.

Every economic principle relates to the process of

• converting value into more value.
• converting value into income.
• converting income into acquisitions.
• converting income into value.
• See Module 1 page Anticipation and Other Relevant Economic Principles for more information.

In the formula V = I /R, what does the I represent?

• net operating income
• potential gross income (Potential gross income is represented by the letters PGI.)
• effective gross income
• equity income
• See Module 1 page Two Methods of Capitalization: Direct Capitalization for more information.

Land and building to the whole is an example of

• contribution.
• externalities.
• substitution.
• anticipation.
• See Module 1 page Anticipation and Other Relevant Economic Principles for more information.