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| Section | Objectives |
|---|---|
| Topic 1: Commercial Real Estate Transactions | - Property valuation and market evaluation
|
1. Which of the following practices maintains the stability and durability of a commercial property?
A) Replacing old tenants with new tenants that pay much higher rent
B) Delaying improvements to the property to save costs
C) Keeping good tenants
D) Increasing the base rent and additional rent in a slow economy
2. Which of the following accurately describes a landlord's commercial property insurance coverage?
A) A landlord's commercial property insurance policy should cover the loss of rental income in the event of a fire, for the period the premises is vacant while repairs are made.
B) A landlord's commercial property insurance policy should cover the loss of the property's equity due to a change in market conditions or to a recession.
C) A landlord's commercial property insurance policy should cover the loss of the tenant's assets and income due to business interruption as the result of a fire or flood.
D) A landlord's commercial property insurance policy should cover the loss of the tenant's assets due to theft from their employees or third parties.
3. In regard to the adjusted book value/asset valuation method of valuing a business, which of the following is correct?
A) A company's adjusted book value should be equal to the actual market value of the business.
B) The adjusted book value method takes goodwill into account when establishing the value of a business.
C) A company's adjusted book value is entirely unrelated to its net worth.
D) The adjusted book value method should not be used when the sale of a business is being implemented or is under consideration.
4. A salesperson is drafting an offer for a vacant industrial site prime for development on behalf of their buyer client. The salesperson has included all proper conditions to protect the buyer, along with sufficient time periods to undertake the due diligence. Which of the following would be an appropriate conditional time period based on the corresponding condition?
A) A conditional time period for a property inspection that is 30 business days in length.
B) A conditional time period for verifying the existence of services such as sewage, water, and electricity that is 30 days in length.
C) A conditional time period for verifying the soil condition or type that is five days in length.
D) A conditional time period for obtaining an approval for a zoning change that is seven business days in length.
5. All of the following aspects of a commercial property may affect its eligibility for Leadership in Energy and Environmental Design (LEED) certification, EXCEPT:
A) Vacancy rate
B) Innovative elements
C) Energy efficiency
D) Sustainability
Solutions:
| Question # 1 Answer: C | Question # 2 Answer: A | Question # 3 Answer: B | Question # 4 Answer: B | Question # 5 Answer: A |
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