Chapter 5

Question 1

Lowest level of trade?

Answer 1

Manufacturer

Question 2

Highest market value will be at which level of trade?

Answer 2

Consumer

Question 3

Highest valuation method results in highest value for inventory

Answer 3

FIFO

First in /first sold

Question 4

LIFO

Answer 4

Last in/first sold

Question 5

Relationship between an object desired and potential purchaser?

Answer 5

Value

Question 6

Appraisal process

Answer 6

Define problem
Preliminary survey and planning
Data collection and analysis
Application of data
Correlation
Final value estimate

Question 7

Return on the investment

Answer 7

Discount rate

Question 8

Return of an investment which is capital recovery

Answer 8

Recapture rate

Question 9

Actual rate

Answer 9

Effective tax rate

Question 10

Each property be appraised as though it were being put to the most profitable use, give. Probable legal, physical and financial constraints

Answer 10

Highest and best use

Question 11

Value of a property for a specific use

Answer 11

Value in use

Question 12

The amount an informed purchaser would offer in exchange for property under normal conditions

Answer 12

Value in exchange

Question 13

The cost of an item at the time it was initially acquired by original user

Answer 13

Historical cost

Question 14

The cost to the present owner at a new or used purchase price

Answer 14

Original cost

Question 15

Cost plus all other cost necessary to achieve normal utility of an asset or group of assets within an operating unit not including maintenance or other operating expenses

Answer 15

Installed cost

Question 16

Cost required to replace the property unit with a new one of like utility in today’s market

Answer 16

Replacement cost new

Question 17

Amount necessary to build an exact replica a of the property unit

Answer 17

Reproduction cost new

Question 18

Amount actually paid or about to be paid in a particular transaction

Answer 18

Market price

Question 19

Most probable price expressed in monetary terms that a property would bring if exposed for sale in the open market in an arms length transaction between a willing seller and will buyer

Answer 19

Market value

Question 20

The purpose of depreciating in appraising is to provide for

Answer 20

Loss in value from all causes

Question 21

Income is best suited for personalty type

Answer 21

Leases equipment

Question 22

Accounting depreciation that require subtraction

Answer 22

Sum of the years

Straight line

Question 23

The netbook value of personal property as reported in financial statements represents the

Answer 23

Cost less accounting depreciation

Question 24

Fixed asset examples

Answer 24

Machinery and furniture

Question 25

Which type of property can be considered real or personal depending on how it is affixed and used by owner?

Answer 25

Leasehold improvements made to a building by the lessee

Question 26

Principle that states a rational buyer will pay no more for a property than cost if a reasonably similar alternative

Answer 26

Substitution principle

Question 27

The single most important tool of appraisal of business personal prop is

Answer 27

Listing or return

Question 28

Dividing the selling price of items comparable to the subject by their gross rental income

Answer 28

Gross income multiplier GIM

Question 29

The unit cost required to replace the property unit with a new one if like utility in today’s market

Answer 29

Replacement cost

Question 30

The number of years of age of the subject property as independent cared by its condition

Answer 30

Effective age

Question 31

Loss on value due to obsolete or incorrect design

Answer 31

Functional obsolescence curable

Question 32

Loss in value due to impairment of desirability or useful arising from economic forces outside the property

Answer 32

Economic obsolescence

Question 33

Which rate does The governing body of a jurisdiction determine based on annual budget requirements and total assessed valuation

Answer 33

Tax rate

Question 34

A more or less permanent or fixed location affecting the extent of tax ability of personal property is

Answer 34

Situs

Question 35

The process where the assessor identifies all taxable property in the jurisdiction and ensures that it is included in the assessment roll

Answer 35

Discovery

Question 36

A result of subtracting accumulated depreciation from historic or acquisition cost

Answer 36

Net book value

Question 37

Accounting depreciation may be defined as a systematic process of

Answer 37

Cost allocation

Question 38

The method of inventory cost accounting that results in the lowest ending inventory value in growing economy is

Answer 38

LIFO