ASA Personal Property & Machinery Valuation 2

Question 1

Which approach to machinery and equipment valuation uses pricing from active secondary markets or dealer price guides?

Accepted Answer

Market (sales comparison) approach

Answer

The market approach for M&E draws on auction results, dealer listings, and published price guides for comparable used equipment.

Question 2

Functional obsolescence in machinery valuation most commonly arises from:

Accepted Answer

Technological advances that make the equipment less efficient than modern alternatives

Answer

Functional obsolescence in M&E is typically driven by technology — newer machines can produce more output, at lower cost, or with less labor.

Question 3

Economic obsolescence of machinery and equipment is caused by:

Accepted Answer

External factors such as reduced demand for the product the equipment produces

Answer

Economic obsolescence originates outside the asset — such as market downturns, regulatory changes, or loss of product demand.

Question 4

The 'orderly liquidation value' of personal property assumes a sale:

Accepted Answer

With adequate time to find a buyer, but not under typical market exposure

Answer

Orderly liquidation value assumes a reasonable but limited time frame — more than a forced liquidation but less than a fully exposed market transaction.

Question 5

A 'trade fixture' differs from a standard fixture in that it:

Accepted Answer

Remains the personal property of the tenant even though attached to the leased premises

Answer

Trade fixtures are installed by a tenant for business purposes and may be removed by the tenant at lease end without conveying with the real estate.

ASA - American Society of Appraisers Certification Practice Test

ASA - American Society of Appraisers Certification Practice Test

ASA Personal Property & Machinery Valuation 2