Submit your answers to multiple choice assignments online using the Submit Multiple Choice Assignments link on your Course Resources webpage. As soon as you have submitted your assignment you can view the answer guide under Assignment History and Answer Guides Marks: 1 mark per question 1. Vacant land commands value primarily based on its: (1) potential use. (2) current use. (3) indirect use. (4) direct use. 2. Which of the following statements regarding the 4-3-2-1 rule is FALSE? (1) This rule is based on the fact that land value has decreasing returns to scale. (2) Actual depth adjustments should be supported by available market data. (3) For a property with a depth of 60 metres, the last 30 metres of depth will only account for approximately 30% of the value of the land. (4) For a property with 40 metres of frontage, the first 10 front-metres will account for approximately 40% of the value of the land. 3. The market value of land is the present value of the future benefits to be derived from that land. Suppose an investor has determined that a proposed new use for a plot of land will return a potential gross income of $220,000 per year with an annual operating cost of $135,000. If the land's market value is $540,000, what is the market capitalization rate? (1) 8.3% (2) 4.196 (3) 15.7% (4) 13.3% 4. Steve is lecturing his colleague on the economic factors that contribute additional market value in a land subdivision project. Which of his points is FALSE? (1) Quality of construction is the fundamental consideration in a subdivision project, as it determines capital needs and the level of entrepreneurial incentives required. (2) Entrepreneurial incentive is the reward expected by the creator of the project for successful completion and sale of the subdivided lots. (3) Labour is reflected in the site improvements, development plans, marketing efforts, legal fees, and project overhead. (4) Capital serves as a bridge between expenditures for land and labour and the subsequent receipt of income once the subdivided lots are sold. 5. Henry is appealing the assessment of his property, as he believes the land value is too high. The overall market value is $400,000 and the land is assessed at $200,000. He has hired an appraiser to provide him with valuation advice. There are no recent sales of vacant parcels in his area, so the appraiser has used the allocation approach. Assume the appraiser has presented Henry with the analysis in Example 4.3. Which of the following statements is TRUE? (1) The allocation results indicate a land value range of $168,000 to $184,000, (2) With his land valued at half of overall market value, the allocation results support his land (3) A 44% allocation indicates a $176,000 land value, which gives a 100% reliable conclusion. (4) Allocation is always preferable to direct comparison in assessment appeals. assessment as fair 6. Which of the following is NOT a comparison-based analysis technique? (1) Subdivision analysis method (2) Breakdown method (3) Land ratio method (4) None of the above 7. A developer plans to purchase a vacant lot and build a fourplex, which represents the highest and best use of the land. The developer wants to determine the maximum bid price based on land residual technique. Assume that the anticipated Not from the projected units is $100,000 and one-half of this will be attributed to the building. The market derived capitalization rate for the land is 5% respectively. Assume also that the finished project is free and clear of debt at the time of completion. Applying the direct capitalization method, the residual land value is: (1) $1,500,000 (2) $1,000,000 (3) $2,000,000 (4) $1,855,000 8. You are appraising a property in Port Moody. This parcel has 115 feet of street frontage, but has 20% more depth than typical properties in this area. It also has access difficulties. Your analysis of recent sales has found a typical lot has a value per front foot of $2,670. You will adjust this -15% for the subject's restricted access and apply a adjustment for the subject's extra depth. You conclude that the market value for the subject land is $2,500 per front foot. If the adjustments are multiplicative, what was the adjustment for depth? (1) There would be no increment for increased depth. (2) +10.2% (3) -9.3% (4) None of the above are correct. 9. Which of the following is FALSE regarding the extraction method of land valuation? (1) This technique cannot be applied when the building's contribution to total property value is small (2) A limitation of the extraction technique is that the appraiser must be able to determine the contributory value of the improvements, estimated at their depreciated cost. (3) Tf sales of improved parcels are scarce, appraised values may be used in lieu of sales prices to obtain estimates of total property values. (4) The extraction method is useful in highly developed areas where there are few, if any, vacant land sales