CCIM 101 - Financial Analysis Questions
and Correct Answers the Latest Update
and Recommended Version
What are the four basic components of NOI?
→ 1 - Potential rental income (PRI)
→ 2 - Vacancy and credit losses
→ 3 - Other income
→ 4 - Operating expenses
[XXXX] is used to determine a property's PRI (Potential Rental Income.)
→ Lease analysis
PRI equals NOI in what property/tenant scenario?
→ If the property has one tenant with a long-term absolute NNN lease.
[XXXX] is PRI minus vacancy and collection losses.
→ ERI (Effective Rental Income)
Name some items which are EXCLUDED from Operating Expenses.
→ Interest and principal on debt on the property
→ Depreciation (cost recovery)
→ Capital Expenditures
→ Income Taxes
→ Reserves for Replacement
→ Tenant Improvements
True or False: Depreciation is included in Operating Expenses.
True of False: Principal and interest on debt financing is included in Operating Expenses
→ False. This is an expense of ownership, not an operating expense.
True or False: Capital Expenditures are included in Operating Expenses.
→ False. They are written off over a period of years.
True of False: Income Taxes are included in Operating Expenses
→ False
True of False: Reserves for Replacement are included in Operating Expenses
→ False
True of False: Tenant Improvements (TI) are included in Operating Expenses
→ False
True of False: Repairs and Maintenance are included in Operating Expenses
→ True
True of False: Property insurance is included in Operating Expenses
→ True
True of False: Utilities are included in Operating Expenses
→ True
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