Site Valuation and Cost Approach - Math Flashcards
(111 cards)
1
Q
1.69 acres contains how many square feet?
A
73,616
2
Q
16 lots sold in a year. What is the absorption rate per month?
- 1.25
- 1.33
- 12
- 16
A
1.33
3
Q
18 lots sold in a year. What is the absorption rate per month?
- 1.25
- 1.5
- 12
- 18
A
1.5
4
Q
2.19 acres contains how many square feet?
- 75775
- 82024
- 95396
- 97912
A
95396
5
Q
20 lots sold in a year. What is the absorption rate per month?
- 1.25
- 1.33
- 1.67
- 20
A
1.67
6
Q
20 lots sold in a year. What is the absorption rate per month?
- 20
- 1.67
- 1.33
- 1.25
A
1.67
7
Q
25 Links = ___ Feet
A
25 Links = 16 1/2 Feet
8
Q
3.54 acres contains how many square feet?
- 133589
- 154202
- 164214
- 187443
A
154202
9
Q
30 lots sold in a year. What is the absorption rate per month?
- 2
- 2.5
- 3
- 3.5
A
2.5
10
Q
72 lots sold in 2 years. What is the absorption rate per month?
- 36
- 12
- 3
- 2.4
A
3
11
Q
A 25-year-old building would cost $2,750,000 to build new today. It is in good condition and you estimate the effective age to be 20 years. Your estimate of total economic life is 50 years, based on the experience of similar properties. By an Age-life method, how much depreciation has accrued?
- 1650000
- 1375000
- 1100000
- 750000
A
1100000
12
Q
A 30-year-old building would cost $1,000,000 to build new today. It is in good condition and you estimate the effective age to be 20 years. Your estimate of total economic life is 45 years, based on the experience of similar properties. By an Age-life method, how much depreciation has occurred?
- 222222
- 333333
- 444444
- 666667
A
444444
13
Q
A 40-year-old building would cost $6,345,000 to build new today. It is in good condition and you estimate the effective age to be 25 years. Your estimate of total economic life is 45 years, based on the experience of similar properties. By an Age-life method, what percent depreciation has accrued?
- 40
- 45
- 56
- 60
A
56
14
Q
A building has a replacement cost of $1,300,000. Deferred maintenance items total $40,000 and the total cost new of the short-lived items is $250,000. If we estimate the total useful life to be 50 years and the actual age of the building is 20 years, how much is the long-lived depreciation?
- 334500
- 355000
- 389000
- 404000
A
404000
15
Q
A building has a replacement cost of $2,400,000. Deferred maintenance items total $40,000 and the total cost new of the short-lived items is $350,000. If we estimate the total useful life to be 50 years, and the actual age of the building is 20 years, how much is the long-lived depreciation?
- 634500
- 755000
- 789000
- 804000
A
804000
16
Q
A building has a replacement cost of $2,450,000. Deferred maintenance items total $125,000 and the total cost new of the short-lived items is $450,000. If we estimate the total useful life to be 50 years and the actual age of the building is 18 years, how much is the long-lived depreciation?
- 634500
- 705000
- 759000
- 675000
A
675000
17
Q
A building has a total calculated cost from the MVS of $63.65 per square foot and it contains three stories that each have 3,500 square feet. The local multiplier is 1.16 and the current cost multiplier is 1.02. What is the indicated total cost for the building?
- 688245
- 790762
- 812370
- 838882
A
790762
18
Q
A building has a total calculated cost from the MVS of $71.24 per square foot and it contains four stories that each have 4,500 square feet. The local multiplier is 1.02 and the current cost multiplier is 1.13. What is the indicated total cost for the building?
- 1388346
- 1399354
- 1412688
- 1478002
A
1478002
19
Q
A building measures 125 x 175 feet. How many lineal feet is that?
- 300
- 450
- 600
- 21875
A
600
20
Q
A building measures 130 x 195 feet. How many lineal feet is that?
- 300
- 450
- 650
- 21875
A
650
21
Q
A building measures 90 x 180 feet. How many lineal feet is that?
- 300
- 450
- 540
- 16200
A
540
22
Q
A commercial building would cost $2,800,000 to build new. It is 8 years old and has sustained depreciation of 1.5% per year. It is on a 6.4 acre lot worth $40,000 per acre. What is its value by the Cost Approach?
- 2530000
- 2625000
- 2720000
- 2890000
A
2720000
23
Q
A commercial building would cost $3,200,000 to build new. It is 10 years old, and has sustained a total of 25% depreciation. It is on a lot worth $1,250,000. What is its value by the Cost Approach?
- 2780000
- 2945000
- 3650000
- 3155000
A
3650000
24
Q
A commercial building would cost $3,200,000 to build new. It is 10 years old and has sustained a total of 20% depreciation. It is on a lot worth $1,250,000. What is its value by the Cost Approach?
- 2780000
- 2945000
- 3810000
- 3155000
A
3810000
25
**A commercial building would cost $6,600,000 to build new. It is six years old and has sustained depreciation of 1.5% per year. It is on a lot worth $900,000. What is its value by the cost approach?**
- 6860000
- 6906000
- 6934000
- 6958000
**6906000**
26
**A commercial lot sold for $180,000. It had 85 feet of frontage and a depth of 145 feet. What did it sell for per square foot?**
- 12.9
- 13.44
- 14.6
- 15.2
**14.6**
27
**A construction contract for a three story building that was 65 x 250 feet indicated a total cost of $3,950,000. What was the cost per square foot?**
- 78.45
- 80.11
- 81.03
- 84.9
**81.03**
28
**A construction contract for a three-story building that was 45 x 220 feet indicated a total cost of $3,360,000. What was the cost per square foot?**
- 97.34
- 101.86
- 106.66
- 113.12
**113.12**
29
**A construction contract for a two-story building that was 60 x 180 feet indicated a total cost of $1,820,000. What was the cost per square foot?**
- 84.26
- 86.12
- 87.07
- 89.29
**84.26**
30
**A farmer owns 8 full sections, 3 half sections, and 3 quarter sections. How many acres is that?**
- 4850
- 6560
- 7480
- 8880
**6560**
31
**A land parcel of 132.8 acres sold for $718,000. What did it sell for per acre?**
- 5407
- 5513
- 5690
- 5728
**5407**
32
**A land parcel of 91.2 acres sold for $775,000. What did it sell for per acre?**
- 6923
- 7412
- 7857
- 8498
**8498**
33
**A lot contains 108,900 square feet. How many acres is that?**
- 1.44
- 1.89
- 2.33
- 2.5
**2.5**
34
**A lot measures 217.48 feet by 324.89 feet. It sold for $235,000. How much did it sell for per acre?**
- 127935
- 133853
- 145062
- 168901
**145062**
35
**A lot measures 414.25 feet by 217.99 feet. It sold for $450,000. How much did it sell for per acre?**
**$217,391
Area Calculations, 414.25 X 217.99 = 90,302 square feet. 90,302 ÷ 43,560 = 2.07 acres. $450,000 divided by 2.07 = $217,391 per acre.**
36
**A lot measures 414.25 feet by 217.99 feet. It sold for $450,000. How much did it sell for per acre?**
- 127935
- 217391
- 222613
- 155240
**217391**
37
**A Nationwide Permit is required for developing projects impacting as little as _____acre of wetlands.**
- 1
- 2
- 1/2
- 1/10
**1/2**
Permits are now required for projects impacting as little as one-half-acre of wetlands, and notification to the Corps is required for an impact as low as 1/10 acre.
38
**A one-story building measuring 120 x 180 was constructed in September 1999 at a cost of $95.25 per square foot. The index for September 1999 was 119.6 and the current index is 202.8. What would be the current cost to construct the building using the cost indexing method?**
- 3497580
- 3533490
- 3687856
- 3861305
**3497580**
39
**A pad site for a fast-food franchise has a contracted monthly ground rent of $3,500 with a 5-year lease. The market rent is $4,000 per month. The market derived cap rate is 11%. What is the fee simple market value of the land by the Ground Rent Capitalization method?**
- 381818
- 414854
- 436364
- 555239
**436364**
40
**A property has an NOI of $270,000. The building value is $2,400,000 and the building cap rate is 9%. The land cap rate is 6%. What is the value of the land by the Land Residual method?**
- 600000
- 900000
- 1100000
- 1250000
**900000**
41
**A property has an NOI of $460,000. The building value is $3,400,000 and the building cap rate is 11%. The land cap rate is 7%. What is the value of the land by the Land Residual method?**
- 875235
- 1228571
- 1337111
- 1450555
**1228571**
42
**A quarter-quarter section contains _________ acres.**
- 40
- 80
- 160
- 240
**40**
43
**A retail store was just built and sold for $1,800,000. You estimate the value of the site to be $450,000 and the cost of the site improvements at $120,000. The building has 18,400 SF of gross building area. What is the unit cost of the structure per square foot?**
- 58.35
- 62.88
- 66.85
- 71.15
**66.85**
44
**A roof has an actual age of 8 years and an effective age of 10 years. It has an expected economic life of 20 years and an expected useful life of 25 years. The cost to replace the roof at the end of its life is $40,000. How much is the short-lived deterioration of the roof.**
- 7200
- 12800
- $14, 000
- 10800
**12800**
45
**A three-story office building has no elevator. To install one would cost $70,000. If it had been installed when the building was being built, it would have cost $50,000. Market evidence shows that if there were an elevator, the rents could be increased by $10,000 per year. The market GIM is 6.5. How much is the depreciation?**
- 20000
- 30000
- 50000
- 70000
**20000**
The value loss is $10,000 X 6.5. = $65,000 - less than the cost to cure of $70,000
Functional Incurable Caused by a Deficiency
Cost of existing item $ 0
Less depreciation previously charged - 0
Plus value of loss 70,000
Less cost if installed new - 50,000
Equals depreciation for functional obsolescence $ 20,000
46
**A waterfront lot sold for $160,000. It had 55 feet of frontage and a depth of 155 feet. What did it sell for per front foot?**
- 2242
- 2622
- 2909
- 3278
**2909**
47
**About what percent of U.S. households are occupied by one or two people?**
- 0.4
- 0.5
- 0.6
- 0.7
**0.6**
48
**An apartment building along the interstate in the next block recently sold for $1,300,000 and a similar apartment building away from the interstate sold for $1,200,000. The typical building to land ratio in this market is 70/30. How much depreciation is attributable to the land?**
- 10000
- 20000
- 30000
- 50000
**30000**
49
**An apartment building in Phoenix lacks air conditioning. If it had been installed when the building was built, it would have cost $20,000 but the cost of retrofitting now is $24,000. Installing A/C would allow the owner to increase his Gross Monthly Rents by $300 per month. The current Gross Income Multiplier (GIM) is 7.0. How much is the depreciation illustrated here?**
**4000**
$300 per month X 12 months X 7.0 = $25,200 gain in value. The cost is $24,000, so it is curable.
The depreciation is $24,000 - $20,000 - or $4,000.
50
**An apartment building in Phoenix has individual window air conditioning units built into the walls of each apartment, but they are inadequate. The reproduction cost of the existing units is $24,000 and they are 25% depreciated. It will cost $8,000 to remove them, but they would bring a salvage value of $3,000. It will cost $25,000 to install an appropriate central air conditioning system: $22,000 for the equipment, and $3,000 for retrofit costs. It would have cost $20,000 if it had been installed when the building was built. Comparable rentals indicate the gross rents for the buildings would increase by $5,000 and the GIM is 5.5. How much would the depreciation be?**
- 6000
- 24000
- 28000
- 30000
**28000**
51
**An apartment building would cost $3,750,000 to build new. It is eight years old and has sustained a total of 15% depreciation. It is on a lot worth $1,200,000. What is its value by the Cost Approach?**
- 3780000
- 3945000
- 4157500
- 4387500
**4387500**
52
**An industrial building would cost $5,200,000 to build new. It is 15 years old and has sustained a total of 40% depreciation. It is on a lot worth $1,250,000. What is its value by the Cost Approach?**
- 4135900
- 4370000
- 4478000
- 5155000
**4370000**
53
**An office building was just built and sold for $2,700,000. You estimate the value of the site to be $700,000 and the cost of the site improvements at $220,000. The building has 22,400 SF of gross building area. What is the unit cost of the structure per square foot?**
- 68.31
- 72.84
- 76.85
- 79.46
**79.46**
54
**An old commercial building recently sold for $250,000. The reproduction cost of the improvements today would be $300,000 and the total depreciation is estimated to be 75%. By extraction, what is the land value?**
- 125000
- 150000
- 175000
- 200000
**175000**
55
**An old commercial building recently sold for $300,000. The reproduction cost of the improvements today would be $400,000 and the total depreciation is estimated to be 80%. By extraction, what is the land value?**
- 175000
- 240000
- 220000
- 200000
**220000**
56
**An old commercial building recently sold for $375,000. The reproduction cost of the improvements today would be $400,000 and the total depreciation is estimated to be 80%. By extraction, what is the land value?**
- 100000
- 225000
- 295000
- 310000
**295000**
57
**Develop a Cost Approach using the following information and an Age-life depreciation method. The cost new of the improvements is $2,565,000, the land value is $750,000, the actual age is 28, and the effective age is 20. The total economic life expectancy judged by comparable sales is 50 years. The estimated value by the Cost Approach is:**
- 2930800
- 2289000
- 3670400
- 3125900
**2289000**
58
**Develop a Cost Approach using the following information and an Age-life depreciation method. The cost new of the improvements is $3,420,000, the land value is $1,100,000, the actual age is 28, and the effective age is 25. The total economic life expectancy judged by comparable sales is 50 years. The estimated value by the Cost Approach is ____________.**
- 2730800
- 2810000
- 3670400
- 4125900
**2810000**
59
**Develop a Cost Approach using the following information and an Age-life depreciation method. The cost new of the improvements is $5,680,000, the land value is $1,750,000, the actual age is 22, and the effective age is 18. The total economic life expectancy judged by comparable sales is 50 years. The estimated value by the Cost Approach is:**
- 4930800
- 5385200
- 5670400
- 6125900
**5385200**
60
**Develop a Cost Approach using the following information and an Age-life depreciation method. The cost new of the improvements is $5,680,000, the land value is $1,750,000, the actual age is 22, and the effective age is 18. The total economic life expectancy judged by comparable sales is 50 years. The estimated value by the Cost Approach is:**
- 4930800
- 6125900
- 5670400
- 5385200
**5385200**
61
**Develop a Cost Approach using the following information and an Age-life depreciation method. The cost new of the improvements is $5,820,000, the land value is $1,600,000, the actual age is 14, and the effective age is 10. The remaining economic life judged by comparable sales is 40 years. The estimated value by the Cost Approach is:**
- 5930800
- 6256000
- 6670400
- 6925900
**6256000**
62
**Each section contains _____ acres.**
- 40
- 160
- 320
- 640
**640**
63
**How many feet are in a chain?**
- 16.5
- 66
- 100
- 660
**66**
64
**How many feet are in a mile?**
- 640
- 1280
- 5280
- 43560
**5280**
65
**How many feet are in a mile?**
- 640
- 3250
- 5280
- 43560
**5280**
66
**How many links are in a chain?**
- 16.5
- 66
- 100
- 660
**100**
67
**In the Rectangular Survey system, each township is divided into ____ sections.**
- 16
- 32
- 36
- 40
**36**
68
**Market-extracted depreciation for a property totaled $300,000. A breakdown method of depreciation indicated a total of $38,500 in physical curable deterioration, $70,500 in incurable physical deterioration, and a total of $83,000 in functional obsolescence. What is your estimate of the external obsolescence for this building?**
- None
- 82500
- 108000
- 121000
**108000**
69
**Marshall & Swift classifies a high-rise as any building with ___ or more stories.**
- 3
- 4
- 5
- 10
**3**
70
**Neighborhood A had 38 land sales in 9 months and Neighborhood B had 56 land sales in 2 years. The absorption rate for Neighborhood A was ___ and the absorption rate for Neighborhood B was ___.**
- 28, 2.3
- 4.2, 3.2
- 4.2, 2.3
- 2.4, 3.4
**4.2, 2.3**
71
**Neighborhood A had 38 land sales in 9 months and Neighborhood B had 56 land sales in 2 years. The absorption rate for Neighborhood A was _________ and the absorption rate for Neighborhood B was ______.**
- 28, 2.3
- 4.2, 4.6
- 2.4, 2.6
- 4.2, 2.3
**4.2, 2.3**
72
**One acre contains ________ square feet.**
- 43560
- 43650
- 32500
- 6400
**43560**
73
**One acre contains ______________ square feet.**
- 1600
- 6400
- 43560
- 45360
**43560**
74
**Seven lots sold at the following prices per acre: $7,500, $8,250, $7,136, $8,444, $8,814, $6,933 and $8,665. What was the mean sales price per acre?**
- 6923
- 7193
- 7622
- 7963
**7963**
75
**Six lots sold at the following prices per square foot: $3.24, $3.36, $3.72, $3.38, $4.01, and $3.18. What was the mean sales price per square foot?**
- 3.31
- 3.48
- 3.64
- 3.78
**3.48**
76
**Six lots sold at the following prices per square foot: $4.23, $4.35, $4.73, $4.88, $5.01, and $5.26. What was the mean sales price per square foot?**
- 4.69
- 4.72
- 4.74
- 4.78
**4.74**
77
**The average family in the United States is now below ____.**
- 4
- 3.5
- 3
- 2.5
**3**
78
**The base cost for a 12,000 square foot Good quality building is $87.35 and the base cost for an Excellent quality building that same size is $122.75. What would be the base cost for a Very Good Quality 12,000 square foot building?**
- 97.4
- 98.1
- 99.2
- 105.05
**105.05**
79
**The base cost for a 12,000 square foot Good quality building is $92.48 and the base cost for an Excellent quality building that same size is $128.44. What would be the base cost for a Very Good Quality 16,000 square foot building?**
- 102.9
- 106.1
- 110.46
- 115.05
**110.46**
80
**The base cost of an office building is $72.64 per SF. It is eight stories high. What would be the adjusted cost per square foot?**
- 74.46
- 67.03
- 78.4
- 91.24
**74.46**
81
**The base cost of an office building is $82.88 per SF. It is seven stories high. What would be the adjusted cost per square foot?**
- 95.14
- 97.03
- 84.54
- 101.24
**84.54**
82
**The building you are appraising has a total calculated cost from the MVS of $59.55 per square foot. The local multiplier is 1.10 and the current cost multiplier is .98. What is the indicated total cost per square foot?**
- 64.19
- 65.66
- 66.12
- 68.18
**64.19**
83
**The building you are appraising has a total calculated cost from the MVS of $62.04 per square foot. The local multiplier is 1.14 and the current cost multiplier is .94. What is the indicated total cost per square foot?**
- 64.55
- 66.48
- 68.12
- 69.33
**66.48**
84
**The contract cost for constructing a building in June 2001 was $675,400. The index for June 2001 was 164.6 and the current index is 255.2. What would be the current cost to construct the building using the Cost Indexing Method?**
- 1046870
- 1133490
- 1275321
- 1458305
**1046870**
85
**The contract cost for constructing a building in June 2002 was $824,900. The index for June 2002 was 132.5 and the current index is 190.8. What would be the current cost to construct the building using the cost indexing method?**
- 1046870
- 1133490
- 1187856
- 1458305
**1187856**
86
**The cost new of the subject property is $1,695,000, the land value is $350,000, and the effective age is 12. The total economic life is estimated to be 40 years. The subject has deferred maintenance items that total $125,000. After these repairs, the effective age will be reduced to 10 years. What is the value of the property by a Cost Approach using the Modified Age-life method of depreciation?**
- 1449000
- 1527500
- 1585500
- 1638400
**1527500**
87
**The cost new of the subject property is $2,270,000, the land value is $950,000, the actual age is 17, and the effective age is 14. The total economic life is estimated to be 40 years. The subject has deferred maintenance items that total $260,000. After these repairs, the effective age will be reduced to 12 years. What is the value of the property by a Cost Approach using the Modified Age-life method of depreciation?**
- 2077000
- 2146500
- 2357000
- 2638400
**2357000**
88
**The cost new of the subject property is $2,695,000, the land value is $750,000 and the effective age is 12. The total economic life is estimated to be 40 years. The subject has deferred maintenance items that total $125,000. After these repairs, the effective age will be reduced to 10 years. What is the value of the property by a Cost Approach using the Modified Age-life method of depreciation?**
- 2449000
- 2938400
- 2885500
- 2677500
**2677500**
89
**The cost new of the subject property is $2,695,000, the land value is $750,000, and the effective age is 12. The total economic life is estimated to be 40 years. The subject has deferred maintenance items that total $125,000. After these repairs, the effective age will be reduced to 10 years. What is value of the property by a Cost Approach using the Modified Age-life method of depreciation?**
- 2449000
- 2677500
- 2885500
- 2938400
**2677500**
90
**The current cost multiplier is .95 and the local cost multiplier is 1.08. What is the combined multiplier?**
- 1.02
- 1.03
- 1.05
- 1.06
**1.03**
91
**The current cost multiplier is 1.06 and the local cost multiplier is .89. The refined square foot cost of the building is $69.35 per square foot and it contains 6,555 square feet. What is the final cost of the building? (HINT: Please round the multiplier and the multiplier- adjusted cost per SF to two decimal places.)**
- 403092.86
- 409563.33
- 416590.56
- 428859.5
**428859.5**
92
**The current cost multiplier is 1.10 and the local cost multiplier is .98. The refined square foot cost of the building is $72.13 per square foot and it contains 8,345 square feet. What is the final cost of the building? (HINT: Please round the multiplier and the multiplier-adjusted cost per SF to two decimal places.)**
- 632092.86
- $648, 874.99
- 666590.56
- 687313.9
**$648, 874.99**
93
**The current cost multiplier is 1.13 and the local cost multiplier is 1.02. What is the combined multiplier?**
- 1.14
- 1.15
- 1.16
- 1.18
**1.15**
94
**The Floor Area/Perimeter multiplier for a 2,000 square foot building with a perimeter of 300 feet is 1.204 and the Floor Area/Perimeter multiplier for a 2,000 square foot building with a perimeter of 350 feet is 1.286. What would be the multiplier for a 2,000 square foot building with a perimeter of 320 feet?**
- 1.203
- 1.2147
- 1.2245
- 1.2368
**1.2368**
95
**The indicated cost figure in a cost manual is $68.22 per square foot for a particular building and the current cost multiplier is .96. What is the current cost per square foot?**
- 62.14
- 64.95
- 65.33
- 65.49
**65.49**
96
**The indicated cost figure in a cost manual is $81.88 per square foot for a particular building and the current cost multiplier is 1.12. What is the current cost per square foot?**
- 88.14
- 91.71
- 95.32
- 98.49
**91.71**
97
**The refined square foot cost of a building is $83.45 per square foot. The current cost multiplier is 1.13. What is the adjusted cost?**
- 94.3
- 95.5
- 96.12
- 98.78
**94.3**
98
**The refined square foot cost of a building is $92.34 per square foot. The current cost multiplier is 1.16. What is the adjusted cost?**
- 104.3
- 105.5
- 106.12
- 107.11
**107.11**
99
**The replacement cost new of the subject property improvements is $2,270,000, the land value is $950,000, the actual age is 17, and the effective age is 14. The total economic life is estimated to be 40 years. The subject has deferred maintenance items that total $260,000 which, if fixed would result in an effective age of 12 years. What is the indicated value of the property by the Cost Approach using the Modified Age-life method of depreciation?**
- 2077000
- 2146500
- 2357000
- 2638400
**2357000**
100
**The Story Height table for a casino you are appraising has a wall height multiplier of 1.355 for 30 feet and 1.467 for 34 feet. Your subject has a wall height of 33 feet. What would be the interpolated multiplier?**
- 1.366
- 1.372
- 1.439
- 1.385
**1.439**
101
**The suburbs began in America in the:**
- 1930s
- 1940s
- 1950s
- 1960s
**1940s**
102
**There are ____________ generally recognized methods of valuing a site.**
- 3
- 4
- 5
- 6
**6**
103
**What would be the Story Height multiplier for a 12 ft ceiling?**
- 1.015
- 1.025
- 1.03
- 1.055
**1.055**
104
**What would be the Story Height multiplier for a 14 ft ceiling?**
- 1.015
- 1.025
- 1.035
- 1.114
**1.114**
105
**You have good comparable sales that indicate the total value of your subject property, as improved, is $260,000. Research shows that typically properties of this type demonstrate that 35% of the total value is in the land and the rest in the improvements. By the Allocation method, what is your opinion of the value of the subject site?**
- 75000
- 91000
- 95000
- 101000
**91000**
106
**A parcel is valued at $290,000. Zoning allows it to be subdivided into 5 lots and it is estimated that each lot could sell for $65,000. Site development (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?**
- Leave it alone
- Subdivide it into only 4 lots
- Subdivide it into 5 lots
- Unable to determine from the data provided
**Leave it alone**
107
**A parcel is valued at $240,000. Zoning allows it to be subdivided into 5 lots and it is estimated that each lot could sell for $65,000. Site development (sewer, grading, road, etc.) would cost $50,000. What is the highest and best use?**
- Leave it alone
- Subdivide it into only 4 lots
- Subdivide it into 5 lots
- Unable to determine from the data provided
**Subdivide it into 5 lots**
108
**An apartment building in Houston lacks air conditioning. If it had been installed when the building was built, it would have cost $30,000, but the cost of retrofitting now is $35,000. Installing A/C would allow the owner to increase his Gross Monthly Rents by $450 per month. The current Gross Income Multiplier (GIM) is 7.0. What type of obsolescence is this?**
- Functional incurable
- Physical curable
- Functional curable
- Physical incurable
**Functional curable**
Increase in value - 450 x 12 x 7 = $37,800, Cost is $35,000 =>
curable
109
**An apartment building in Miami lacks air conditioning. If it had been installed when the building was built, it would have cost $20,000, but the cost of retrofitting now is $24,000. Installing A/C would allow the owner to increase his Gross Monthly Rents by $300 per month. The current Gross Income Multiplier (GIM) is 7.0. What type of obsolescence is this?**
- Functional incurable
- Physical curable
- Functional curable
- Physical incurable
**Functional curable**
Increase in value - 300*12*7 = $25,200
Cost - $24,000 => curable
110
a**An apartment building in Phoenix has individual window air conditioning units built into the walls of each apartment, but they are inadequate. The reproduction cost of the existing units is $24,000 and they are 25% depreciated. It will cost $8,000 to remove them, but they would bring a salvage value of $3,000. It will cost $25,000 to install an appropriate central air conditioning system: $22,000 for the equipment, and $3,000 for retrofit costs. It would have cost $20,000 if it had been installed when the building was built. Comparable rentals indicate the gross rents for the buildings would increase by $5,000 and the GIM is 6.5. What type of depreciation is this?**
- Functional curable
- Physical curable
- Functional incurable
- Physical incurable
**Functional curable**
Increase in value - 5000*6.5 = 32,500
Cost = 8000-3000+25000 = 30,000 => curable
Note: to calculate amount of depreciation
Cost of existing item $24,000
Less depreciation previously charged - $6,000
Plus cost to cure (all costs) $30,000
Less cost if installed new - 20,000
Equals depreciation for functional obsolescence $28,000
111
**An apartment building in Phoenix has individual window air conditioning units built into the walls of each apartment, but they are inadequate. The reproduction cost of the existing units is $25,000 and they are 30% depreciated. It will cost $10,000 to remove them, but they would bring a salvage value of $4,000. It will cost $30,000 to install an appropriate central air conditioning system: $25,000 for the equipment, and $5,000 for retrofit costs. It would have cost $25,000 if it had been installed when the building was built. Comparable rentals indicate the gross rents for the buildings would increase by $6,000 and the GIM is 6.5. What type of depreciation is this?**
- Functional curable
- Physical curable
- Functional incurable
- Physical incurable
**Functional curable**
Increase in value - 6000*6.5=39000
Cost to cure=36000 => curable
Note: To calculate depreciation:
Functional Curable requiring a Substitution Procedure
Cost of existing item $ 25,000
Less depreciation previously charged - 7,500
Plus cost to cure (all costs) 36,000
Less cost if installed new - 25,000
Equals depreciation for functional obsolescence $28,500
