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Questions and Answers
Which approach to value is used in the direct capitalization approach to property valuation?
Which approach to value is used in the direct capitalization approach to property valuation?
- Market approach
- Cost approach
- Sales comparison approach
- Income approach (correct)
What is the discount rate or required return used in the valuation formula?
What is the discount rate or required return used in the valuation formula?
- Real GOC yield
- Expected inflation
- Risk premium
- 10 year Gov't Bond Yield (correct)
What is the purpose of using a real estate pro forma?
What is the purpose of using a real estate pro forma?
- To determine the property's appreciation
- To analyze the property's cash flows (correct)
- To assess the property's risk
- To calculate the property's value
What does the term 'cap rates' refer to in property valuation?
What does the term 'cap rates' refer to in property valuation?
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What is the value10 in the valuation formula?
What is the value10 in the valuation formula?
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