IAAO Course 102 - Exam Prep Exam and 100%
correct Answers
Components of the Capitalization Process
Ans: Value, Net Operating Income, and Capitalization Rate
Quiz Principle of Anticipation
Ans: The underlying principle which provides the basis of the income capitalization approach.
(value is created by the expectation of benefits to be derived in the future).
Quiz Leverage
Ans: The borrowing of funds in hopes of earning a greater return than the cost of the borrowed
funds.
Quiz Chattel Mortgage
Ans: A mortgage only on personal property.
Quiz Lease
, Ans: A written document in which the rights to use & occupy land or structures are transferred
by the owner to another for a specified period in return for a specified rent.
Quiz Excess Rent
Ans: The amount derived when contract rent exceeds market rent.
Quiz Deficit Rent
Ans: (also known as leasehold rent or leasehold income) occurs when market rent is greater
than contract rent.
Quiz Rent Concessions
Ans: Free Rent & Tenant Improvements
Quiz GIM
Ans: Calculated by dividing the sale price (value) by annual gross income.
Quiz Why do we reconstruct Income & Expenses?
Ans: To estimate expected income.
Quiz IRV
correct Answers
Components of the Capitalization Process
Ans: Value, Net Operating Income, and Capitalization Rate
Quiz Principle of Anticipation
Ans: The underlying principle which provides the basis of the income capitalization approach.
(value is created by the expectation of benefits to be derived in the future).
Quiz Leverage
Ans: The borrowing of funds in hopes of earning a greater return than the cost of the borrowed
funds.
Quiz Chattel Mortgage
Ans: A mortgage only on personal property.
Quiz Lease
, Ans: A written document in which the rights to use & occupy land or structures are transferred
by the owner to another for a specified period in return for a specified rent.
Quiz Excess Rent
Ans: The amount derived when contract rent exceeds market rent.
Quiz Deficit Rent
Ans: (also known as leasehold rent or leasehold income) occurs when market rent is greater
than contract rent.
Quiz Rent Concessions
Ans: Free Rent & Tenant Improvements
Quiz GIM
Ans: Calculated by dividing the sale price (value) by annual gross income.
Quiz Why do we reconstruct Income & Expenses?
Ans: To estimate expected income.
Quiz IRV
