A subject project closed 18 sales. The competitive market, including the subject project, closed 120 sales in the same period. What is the subject's capture rate?
Correct Answer
B) 0.15
Capture = 18 project closed sales / 120 total competitive-market closed sales = 0.15. Keep the stated numerator, denominator and units distinct. Common errors: adding the subject’s sales to a market total that already includes them gives 0.13; inverting the ratio gives 6.67; excluding the subject’s sales from the market total gives 0.18.
Why This Is the Correct Answer
Option B is correct because capture rate equals subject closed sales divided by total competitive-market closed sales: 18 / 120 = 0.15. The stem states the competitive total already includes the subject project, so 120 is the correct denominator without adding or removing the subject's sales.
Why the Other Options Are Wrong
Option A: 0.13
Option A is wrong because 0.13 comes from adding the subject's sales to a market total that already includes them (18 / (120 + 18) = 18 / 138 = 0.13). That double counts the subject; the correct ratio is 18 / 120 = 0.15.
Option C: 0.18
Option C is wrong because 0.18 comes from removing the subject's sales from the market total (18 / (120 - 18) = 18 / 102 = 0.18). The capture rate uses the full competitive total of 120, giving 0.15.
Option D: 6.67
Option D is wrong because 6.67 comes from inverting the ratio (120 / 18 = 6.67). The capture rate puts the subject's sales on top: 18 / 120 = 0.15.
Part over whole
Capture rate is the subject's piece of the pie: part over whole. If the whole already contains the part, use it as given.
How to use: Use 'part over whole' to set up any share or capture rate calculation correctly.
Exam Tip
Read whether the market total includes the subject before computing. If it does, divide the subject's sales by the stated total without adjusting it.
Common Mistakes to Avoid
- -Double counting the subject in the market total
- -Excluding the subject from a total that is defined to include it
- -Inverting the ratio
Concept Deep Dive
Analysis
This question tests a capture rate calculation where the market total already includes the subject. The capture rate is subject sales divided by total competitive-market sales over the same period. Because the 120 already includes the subject's 18 sales, no adjustment to the denominator is needed.
Background Knowledge
A capture rate measures the share of total market activity that a subject project achieves. It helps an appraiser judge whether a projected absorption for the subject is reasonable relative to the overall market. The numerator and denominator must cover the same period and consistent definitions.
Real-World Application
An appraiser reviewing a subdivision's sales finds it closed 18 of the 120 sales in its competitive market over the year. The 15% capture rate helps the appraiser test whether the developer's projected sales pace is consistent with the subdivision's demonstrated market share.
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