Q1. What process is used to assign costs in an ABC system? Provide numerical example.
Q2. How is relevant quantitative and qualitative information used in special order decisions? Explain and analyze using numerical example.
Q3. List and describe the property types
Q4. What are the main activities in the acquisition phase when investing in distressed properties ?
Q5. A 1,500 square foot office space is leased at SAR 14.00 square foot. The space is vacant one month out of the year. Office expenses are SAR 7.50 per square foot and an expense stop is set at SAR 6.50 per square foot. What is the annual net operating income?
Q6. Consider the following property:
1,000 Square foot; SAR 50 per square foot new.
Depreciation rate equals 10%.
Land value is estimated at SAR 15,000.
Gross Rent Multiplier (GRM) = 4, derived from the market.
Subject potential gross income (P G I) is SAR 150,000 per year.
1. Calculate the property value estimate with the cost approach.
2. Calculate property value estimate with the income approach.
Q7. A property produces a first-year net operating income of SAR 24,000. Because of the long economic life of the building, the income is considered as a perpetuity that will grow by 2.5% per year. Using a discount rate of 9.5%, compute the estimated property value.
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