Free CAE Property Valuation Techniques Questions and Answers

Question 1

Which of the following is a key method used in the cost approach to valuation?

Accepted Answer

Depreciated replacement cost

Answer

Gross rent multiplier

Answer

Direct capitalization

Answer

Comparable sales ratio

Question 2

What is the primary principle behind the sales comparison approach?

Accepted Answer

Substitution

Answer

Anticipation

Answer

Progression

Answer

Contribution

Question 3

Which factor is NOT typically considered in the income approach to valuation?

Accepted Answer

Property taxes

Answer

Net operating income

Answer

Capitalization rate

Answer

Market rent

Question 4

What does 'functional obsolescence' refer to in property valuation?

Accepted Answer

Outdated design or inefficiency

Answer

Damage from natural disasters

Answer

Changes in zoning laws

Answer

External noise pollution

Question 5

Which valuation method is most appropriate for income-producing properties?

Accepted Answer

Income approach

Answer

Sales comparison

Answer

Cost approach

Answer

Land residual method

Question 6

Which element most affects land value in the cost approach?

Accepted Answer

Location

Answer

Zoning

Answer

Foundation type

Answer

Window placement