Multiple Choice Identify the
letter of the choice that best completes the statement or answers the question.


1.

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 


2.

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 


3.

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 


4.

30) Three years ago, Ms. Owner
paid $65,000 for her property. During her period of ownership, 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 


5.

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 


6.

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 


7.

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 
