ASC Cash Flow Analysis 2

Question 1

In Argus Enterprise, which cash flow line item represents the difference between Potential Gross Revenue and Effective Gross Revenue?

Accepted Answer

Vacancy & Credit Loss

Answer

Vacancy & Credit Loss is subtracted from Potential Gross Revenue to arrive at Effective Gross Revenue, accounting for unleased space and uncollected rents.

Question 2

When analyzing a multi-tenant office property in Argus, 'Recovery Income' on the cash flow report typically refers to:

Accepted Answer

Tenant reimbursements for operating expenses

Answer

Recovery Income represents tenant reimbursements for operating expenses such as CAM, insurance, and taxes under gross-up or NNN lease structures.

Question 3

A retail property cash flow model shows 'Percentage Rent' as a separate line. This income is triggered when:

Accepted Answer

Tenant sales exceed a specified natural breakpoint

Answer

Percentage rent kicks in once tenant sales surpass the natural breakpoint, calculated as base rent divided by the percentage rent rate.

Question 4

In Argus, the 'Gross-Up' feature for operating expense recoveries is used to:

Accepted Answer

Normalize expenses to a fully occupied level for proration purposes

Answer

Gross-up normalizes variable operating expenses to a 100% occupancy basis so each tenant pays a fair pro-rata share regardless of actual occupancy.

Question 5

Which of the following best describes 'Above-Grade Cash Flow' in the context of a leveraged Argus model?

Accepted Answer

Cash flow after debt service but before taxes

Answer

Above-Grade Cash Flow (also called Cash Flow Before Tax or Equity Cash Flow) is the income remaining after all operating expenses and debt service obligations are paid.

(ASC) Argus Software Certification Practice Test

(ASC) Argus Software Certification Practice Test

ASC Cash Flow Analysis 2