A comparable sold for $300,000 and carries adjustments of +$12,000, -$5,000, +$3,000 and -$2,000. What is the net adjustment?
Correct Answer
D) +$8,000
Why this is correct: the net adjustment is the signed sum. Calculation: +$12,000 - $5,000 + $3,000 - $2,000 = +$8,000. Why the other choices are wrong: +$22,000 adds the absolute values, which is the gross adjustment and a different measure; -$8,000 has the correct magnitude and the wrong sign; +$18,000 omits one of the two downward adjustments.
Why This Is the Correct Answer
Why this is correct: the net adjustment is the signed sum. Calculation: +$12,000 - $5,000 + $3,000 - $2,000 = +$8,000. Why the other choices are wrong: +$22,000 adds the absolute values, which is the gross adjustment and a different measure; -$8,000 has the correct magnitude and the wrong sign; +$18,000 omits one of the two downward adjustments.
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A property generates $48,000 in annual net operating income. Using a capitalization rate of 8%, what is the indicated value using direct capitalization?
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Comparable A sold for $240,000 and contains 1,500 square feet. Comparable B sold for $375,000 and contains 2,500 square feet. The subject contains 2,000 square feet. Using the average of the two indicated rates, what value is indicated for the subject?