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Florida AQB Certified General Appraiser Exam: Study Guide  /  Business Courses

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Cost Approach to Real Estate Valuation Chapter Exam

Exam Instructions:

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

Page 1

Question 1 1. The cost approach valuation of an existing house is $95,000. To purchase another lot of land nearby and build an identical house would cost $150,000. Which of the following may be true?

Question 2 2. In which of these situations does the cost approach to property valuation work best?

Question 3 3. What is the central assumption of the cost approach to property valuation?

Question 4 4. Which of the following is NOT a limitation of the cost approach to property valuation?

Question 5 5. The building cost of an existing property is $85,000. A similar house could be built for $30,000 on a piece of land that could be bought for $25,000. The appraiser estimates the existing property to have $20,000 worth of depreciation. What is the valuation price using the cost approach method?

Page 2

Question 6 6. An appraiser has been called in to evaluate a property located in an area of Boston which is deemed an historic district. The appraiser should be using the _____ to determine the approximate value.

Question 7 7. When conducting an evaluation of a commercial property, labor costs, material costs, and office equipment costs are all examples of _____ costs.

Question 8 8. The cost approach is defined as an approximation of the current cost of replacing or reproducing a building, subtracting an estimate for depreciation, and _____

Question 9 9. There are three different methods to estimate value of a property. The income approach, the sales comparison approach, and the _____ approach.

Question 10 10. The formula for determining entrepreneurial profit for appraisal of a business is _____.

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Question 11 11. A method of estimating physical depreciation, where an appraiser would analyze each cause of depreciation separately, measures the amount of each and then total the estimates to indicate a lump-sum figure that is deducted from the cost new is called the _____ method.

Question 12 12. The normal wear and tear and lessening of a building's value as it ages is called _____.

Question 13 13. A home was built in what was a residential area in 1970, and is now surrounded by factories and commercial office space. Although the home has been modernized and updated, the price of the structure has gone down in recent years. The appraiser stated that although the condition of the home is satisfactory, the declined value reflects its _____.

Question 14 14. In depreciating a property, examples of a short-lived deterioration might include _____.

Question 15 15. In appraisal, two categories of physical deterioration are _____ and _____.

Page 4

Question 16 16. The cost approach for real estate valuation is used for _____.

Question 17 17. Using cost manuals and other services _____.

Question 18 18. Actual costs are helpful and need _____.

Question 19 19. The goal of the cost approach method is _____.

Question 20 20. Market extraction for cost determination involves _____.

Cost Approach to Real Estate Valuation Chapter Exam Instructions

Choose your answers to the questions and click 'Next' to see the next set of questions. You can skip questions if you would like and come back to them later with the yellow "Go To First Skipped Question" button. When you have completed the practice exam, a green submit button will appear. Click it to see your results. Good luck!

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