The Key to Meaningful Valuations in Real Estate Is to Use

question 27

Multiple Choice

The key to meaningful valuations in real estate is to use defensible cash flow estimates. All of the following statements are true in regards to generating accurate cash flow estimates EXCEPT:

• A) Investors should include only those sources of income and expenses that relate directly to the income producing ability of the property.
• B) Investors should only consider recent events, rather than long-term trends when evaluating revenue and expense items.
• C) Investors should obtain information about comparable properties whenever possible.
• D) Investors should take into consideration local zoning, land use, and environmental controls that may impact the future flow of funds.

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Definitions:

Economic Situation

The state of the economy at a specific time, including factors like employment, GDP, inflation rates, and market health.

Farmers' Alliance

A broad mass movement in the rural United States during the late 19th century, which sought to improve the economic conditions for farmers through the creation of cooperatives and political advocacy.

Federal Troops

Military forces deployed by the federal government of a nation, often used to denote soldiers sent to enforce laws within the country, including during periods of civil unrest.