Basic Questions to know Flashcards Preview

BUSI 352 > Basic Questions to know > Flashcards

Flashcards in Basic Questions to know Deck (4)
Loading flashcards...
1
Q

For example, if a building is priced at $1,000,000, and it generates $100,000 in net revenue, its capitalization, or ‘cap rate’ would be what?

A

10%
Cap rate = NOI/Market price
NOI=$100,000
Market Price= $1,000,000

2
Q

Which approach is used where the property is difficult to categorize or there are no similar properties to compare to?

1) Cost Approach
2) Direct Comparison
3) Income Approach

A

Cost Approach

3
Q

What is basically COST APPROACH

A

You basically find the cost of to BUILD or REPLACE the Building from the ground up.

4
Q

What is another name for INCOME APPROACH

A

Capitalization Approach