Multiple Choice
Identify the
letter of the choice that best completes the statement or answers the question.
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1.
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27) Five apartments rent for
$550 per month, and five others for $600 per month. There is an 8 percent vacancy rate and monthly
expenses of $250. If a buyer wants to yield an 8 percent return, what should he pay for the
property?
a. | $790,375 | c. | $756,000 | b. | $765,000 | d. | $790,735 |
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2.
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28) A building has a semiannual
effective gross income of $250,000. If the annual expenses are 20 percent of the effective gross
income, what is the net operating income?
a. | $500,000 | c. | $100,000 | b. | $200,000 | d. | $400,000 |
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3.
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29) If the gross rent multiplier
of a property is 112 and the rent is $600 monthly, what is the value of the
property?
a. | $76,200 | c. | $27,600 | b. | $62,700 | d. | $67,200 |
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4.
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30) Three years ago, Ms. Owner
paid $65,000 for her property. During her period of owner-ship, she added a family room valued at
$6,500, and $3,000 worth of other improvements. If she sells the property for $95,000 and pays a 7
percent commission, what capital gains may she exclude?
a. | $13,850 | c. | $75,400 | b. | $74,500 | d. | $88,350 |
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5.
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31) Mr. Howard purchased a home
for $250,000. He added a tennis court at a cost of $10,000. Two years later, he sold his property for
$325,000 and paid a 7 percent commission plus $250 in attorney fees. If he buys another property for
$350,000, how much capital gains will he exclude?
a. | $22,750 | c. | $42,250 | b. | $42,000 | d. | $42,520 |
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6.
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32) A property is now worth
$117,978. If it has appreciated 6 percent each year for the past two years, what was the original
investment?
a. | $111,300 | c. | $104,245 | b. | $105,000 | d. | $110,899 |
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7.
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33) A property is now worth
$98,250. If it has depreciated in value 5 percent each year for the past two years, what was the
original investment?
a. | $103,421 | c. | $108,864 | b. | $103,241 | d. | $108,320 |
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