23 Questions
Which of the following best describes the acquisition cost of machinery for tax purposes?
The cost of purchasing the machinery plus transportation, handling, and installation fees
What does 'actual use' refer to in the context of property valuation?
The purpose for which the property is primarily used
What is the definition of 'appraisal/valuation' in the context of property assessment?
The act or process of estimating the value of a property for a specific purpose
Which approach to value considers the cost of acquiring land and building a new property with equal utility or adapting an old property to the same use with no undue cost due to delay?
Cost Approach
What is the term used to describe the value remaining after deducting depreciation from the replacement cost?
Depreciated Value
Which method of valuation involves comparing the property to similar properties that have sold recently?
Direct Comparison Approach
What is the rate used to convert a future monetary sum into present value called?
Discount Rate
Which method is used to find the implied or expected rate of return of a project in discounted cash flow analysis?
IRR
What is the underlying assumption of the Investment Method in valuations?
Investors will pay no more for the subject asset than for another asset with a comparable income stream
What are lands used to produce crops or forage for livestock and require the application of water other than natural rainfall called?
Irrigated Land
What is the term used to refer to the manner of utilization, allocation, development, and management of land?
Land Use
Which of the following is the correct definition of DCF analysis?
DCF analysis involves projecting periodic cash flows and applying a discount rate to determine the present value of an income stream associated with a property or business.
What is the term used to describe a non-possessory interest in landed property conveying use, but not ownership, of a portion of that property?
Easement
Which term refers to a loss in value due to factors outside the subject property?
External Obsolescence
What is the procedure called where the value of land or improvements can be determined by deducting the value of a known component from the total sale price or value?
Extraction Method
Which one of the following is the correct definition of 'Arm's Length Transaction'?
A transaction between unrelated parties that is freely arrived at in the open market
What is the definition of 'Assessed Value'?
The market value of the real property multiplied by the assessment level
What is the definition of 'Assessment'?
The act or process of estimating the value of a property
What is the definition of 'Capitalization'?
The conversion of net income into the equivalent capital value
Which one of the following is the correct definition of Goodwill?
An intangible asset based on the probability that customers will continue to resort to the same premises where the business is carried on under a particular name
Which one of the following is the correct definition of Ground Lease?
A long-term lease that allows the lessee to improve or build on the land
Which one of the following is the correct definition of Improvements?
Buildings, structures, or modifications to land intended to enhance the value or utility of the property
Which one of the following is the correct definition of Income Multiplier or Years' Purchase?
The ratio between the sale price or value of a property and the average annual income or income expectancy
Test your knowledge on Discounted Cash Flow (DCF) Analysis. This quiz will cover the methodology, projection of cash flows, discount rates, and more. Sharpen your valuation skills and learn how to determine the present value of income streams associated with properties or businesses.
Make Your Own Quizzes and Flashcards
Convert your notes into interactive study material.
Get started for free
