FIN 3300 Exam 1 WMU, FIN 3300 with
Complete Solutions
Real Estate - ANSWER-Land and all permanent attachments (object)
Real Property - ANSWER-Laws and Rights associated with that object
Land - ANSWER-Raw land that is unimproved land that is not ready for building
improvements
Improved Parcel - ANSWER-Any vertical structure, does not have to add value
Vacant - ANSWER-Not improved or legally ready to be improved
Site - ANSWER-development from the street is your duty
Pad Site - ANSWER-unimproved land ready to build on and utilities already installed
Chattels - ANSWER-all objects that are not real estate
Personal Property - ANSWER-laws and rights associated with chattel
fixture - ANSWER-item of chattel that is now part of real estate
Criteria to determine a fixture - ANSWER-1. How its physically attached
2. Method of adaptation (intent of the parties)
3. Existence of an agreement (trade fixture)
constructive annexation - ANSWER-it doesn't have to be attached
ex. garage door remote
emblement - ANSWER-an annual cultivated crop
Things you don't plant every year (ex. apple tree) is real estate
Things you do plant every year (ex. corn) is not real estate, its YOURS
appurtenance - ANSWER-a right or privilege or improvement that belongs to and
passes with land (ex. community pool)
3-Dimensionality - ANSWER-1. Surface rights
2. Air rights
3. Subsurface rights (pollution)
,Physical Levels of Ownership - ANSWER-1. Indestructible- may not be usable, but still
exists
2. Immobile- surpluses and scarcity
3. Heterogeneous- no two parcels alike
4. 3-dimensionality-surface,subsurface, air
Economic characteristics of real estate - ANSWER-1. Scarcity- fixed supply, only so
much
2. Fixed investment- changes last long time
3. Situs- added increment to value due to location only
Situs - ANSWER-Added increment to value due to location only
Ex. school systems, view, distance from work
Arbitraging your location - ANSWER-Living between two big cities so you have more
options when looking for a new job
Innocent Land Owners Defense - ANSWER-Claiming you are not responsible for
cleaning it up - Act 407
Polluter Pays Act - ANSWER-In Michigan, if you own a contaminated site, you are
responsible for cleaning it up
Legal Descriptions - ANSWER-1. Metes and Bounds
2. Rectangular Survey System
3. Platting or Subdividing
Metes and Bounds - ANSWER-Identify a point of origin and measure
Ex. Rock, tree, river
Rectangular Survey System - ANSWER-Grid paper System of establishing boundaries
Principle Meridian - ANSWER-Certain longitude (north and south) lines selected
Base Line - ANSWER-attitude line intercepting principle meridian
township lines - ANSWER-run every 6 miles north and south of the base line (run
laterally)
range lines - ANSWER-Run every 6 miles east and west of the principle meridian (run
longitudinally)
Platting - ANSWER-(Sub dividing) - recording a map and a set of legal descriptions to
describe lots
, Vertical Land Descriptions - ANSWER-Air rights, Important when buying "vertical land"
(apartment unit)
Datum - ANSWER-a point, line, or surface from which a vertical height or depth is
measured. Usually Sea Level
water rights - ANSWER-The right of a landowner to water adjoining or passing through
property.
Riparian - ANSWER-Water rights associated with moving bodies of water - own land
adjacent to a river/stream
Littoral - ANSWER-Water rights associated with a non-moving body of water
Estate - ANSWER-any time we have interest in real estate
or
Anytime you have rights in real estate
Allodial System - ANSWER-Framework of our laws that define estate
-System of real estate rights, land ownership,
-Bundle of Rights - always changing
-Public rights vs. Private rights
Public Rights - ANSWER-1. Property taxes
2. The right of Eminent Domain
3. The right of Escheat
4. Police Power
Carrying Costs - ANSWER-Costs that rise with increases in the level of investment in
current assets/ cost of storing larger amounts of inventory
Shortage Costs - ANSWER-order costs and stock out costs
Order costs - ANSWER-The cost of ordering additional inventory or transferring cash
Stock-Out Costs - ANSWER-The cost of lost sales due to lack of inventory, including
lost customers
Cash Budget - ANSWER-A forecast of cash receipts and disbursements for the next
planning period
Line of Credit - ANSWER-A formal (committed) or informal (noncommittal) prearranged,
short-term bank loan
Complete Solutions
Real Estate - ANSWER-Land and all permanent attachments (object)
Real Property - ANSWER-Laws and Rights associated with that object
Land - ANSWER-Raw land that is unimproved land that is not ready for building
improvements
Improved Parcel - ANSWER-Any vertical structure, does not have to add value
Vacant - ANSWER-Not improved or legally ready to be improved
Site - ANSWER-development from the street is your duty
Pad Site - ANSWER-unimproved land ready to build on and utilities already installed
Chattels - ANSWER-all objects that are not real estate
Personal Property - ANSWER-laws and rights associated with chattel
fixture - ANSWER-item of chattel that is now part of real estate
Criteria to determine a fixture - ANSWER-1. How its physically attached
2. Method of adaptation (intent of the parties)
3. Existence of an agreement (trade fixture)
constructive annexation - ANSWER-it doesn't have to be attached
ex. garage door remote
emblement - ANSWER-an annual cultivated crop
Things you don't plant every year (ex. apple tree) is real estate
Things you do plant every year (ex. corn) is not real estate, its YOURS
appurtenance - ANSWER-a right or privilege or improvement that belongs to and
passes with land (ex. community pool)
3-Dimensionality - ANSWER-1. Surface rights
2. Air rights
3. Subsurface rights (pollution)
,Physical Levels of Ownership - ANSWER-1. Indestructible- may not be usable, but still
exists
2. Immobile- surpluses and scarcity
3. Heterogeneous- no two parcels alike
4. 3-dimensionality-surface,subsurface, air
Economic characteristics of real estate - ANSWER-1. Scarcity- fixed supply, only so
much
2. Fixed investment- changes last long time
3. Situs- added increment to value due to location only
Situs - ANSWER-Added increment to value due to location only
Ex. school systems, view, distance from work
Arbitraging your location - ANSWER-Living between two big cities so you have more
options when looking for a new job
Innocent Land Owners Defense - ANSWER-Claiming you are not responsible for
cleaning it up - Act 407
Polluter Pays Act - ANSWER-In Michigan, if you own a contaminated site, you are
responsible for cleaning it up
Legal Descriptions - ANSWER-1. Metes and Bounds
2. Rectangular Survey System
3. Platting or Subdividing
Metes and Bounds - ANSWER-Identify a point of origin and measure
Ex. Rock, tree, river
Rectangular Survey System - ANSWER-Grid paper System of establishing boundaries
Principle Meridian - ANSWER-Certain longitude (north and south) lines selected
Base Line - ANSWER-attitude line intercepting principle meridian
township lines - ANSWER-run every 6 miles north and south of the base line (run
laterally)
range lines - ANSWER-Run every 6 miles east and west of the principle meridian (run
longitudinally)
Platting - ANSWER-(Sub dividing) - recording a map and a set of legal descriptions to
describe lots
, Vertical Land Descriptions - ANSWER-Air rights, Important when buying "vertical land"
(apartment unit)
Datum - ANSWER-a point, line, or surface from which a vertical height or depth is
measured. Usually Sea Level
water rights - ANSWER-The right of a landowner to water adjoining or passing through
property.
Riparian - ANSWER-Water rights associated with moving bodies of water - own land
adjacent to a river/stream
Littoral - ANSWER-Water rights associated with a non-moving body of water
Estate - ANSWER-any time we have interest in real estate
or
Anytime you have rights in real estate
Allodial System - ANSWER-Framework of our laws that define estate
-System of real estate rights, land ownership,
-Bundle of Rights - always changing
-Public rights vs. Private rights
Public Rights - ANSWER-1. Property taxes
2. The right of Eminent Domain
3. The right of Escheat
4. Police Power
Carrying Costs - ANSWER-Costs that rise with increases in the level of investment in
current assets/ cost of storing larger amounts of inventory
Shortage Costs - ANSWER-order costs and stock out costs
Order costs - ANSWER-The cost of ordering additional inventory or transferring cash
Stock-Out Costs - ANSWER-The cost of lost sales due to lack of inventory, including
lost customers
Cash Budget - ANSWER-A forecast of cash receipts and disbursements for the next
planning period
Line of Credit - ANSWER-A formal (committed) or informal (noncommittal) prearranged,
short-term bank loan
