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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. A buyer client is interested in purchasing a 30,000 sq. ft. industrial building in an industrial park. The buyer's salesperson drafts an agreement of purchase and sale that includes an environmental site assessment condition that must be met at the buyer's own expense, and to the buyer's satisfaction. Which of the following is NOT an accurate statement regarding the environmental site assessment condition?

A) The environmental site assessment condition makes the offer conditional upon the buyer determining that the property is free from hazardous conditions or substances.
B) The environmental site assessment condition makes the offer conditional upon all possible court actions regarding environmental matters being thought of and reported.
C) The environmental site assessment condition makes the offer conditional upon the seller delivering documents, records, and reports relating to environmental matters to the buyer upon request.
D) The environmental site assessment condition makes the offer conditional upon the buyer determining that no limitations or restrictions affecting the continued use of the property exist.

2. A salesperson has several obligations to the buyer when assisting them in the purchase of a commercial condominium unit for their own use. Which of the following is one of those obligations?

A) Confirm the buyer's intended use adheres to all municipal zoning requirements
B) Review all documentation and advise the buyer regarding the financial status of the condominium corporation, including the reserve fund
C) Advise the buyer to commission a Phase 3 Environmental Site Assessment in addition to their inspection
D) Ensure the buyer had the opportunity to fully inspect the financial statements of both the condominium and the seller's business

3. If a property in Ontario is assessed and valued as farmland by the Municipal Property Assessment Corporation (MPAC), the farmer could receive a 75% tax reduction for municipal taxes if certain conditions are met. Which of the following describes a condition that must be met?

A) They have a valid harmonized sales tax (HST) registration number under the Excise Tax Act.
B) They carry on a farming business generating a net profit of $100,000.
C) They are Canadian citizens or permanent residents of Canada.
D) They submit the appropriate application semi-annually.

4. A salesperson is representing a buyer client in the purchase of a fully tenanted mixed-use building. The agreement of purchase and sale will be in the name of a corporation owned by the buyer and several other shareholders. Which of the following statements is correct regarding the signing of this agreement of purchase and sale?

A) The buyer must sign and date below the printed name of the corporation.
B) The general partner of the company must sign and date below the printed name of the limited company.
C) An authorized signing officer of the company must sign and date over the words: "I haveauthority to bind the corporation" and below the printed registered name.
D) A major shareholder of the company must sign and date over their printed name.

5. 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.

Solutions: