ASC Financial Reporting 3

Question 1

In ARGUS, the 'Available Cash Flow' line on a cash flow report is best described as:

Accepted Answer

NOI minus capital expenditures and debt service

Answer

Available Cash Flow (also called cash-on-cash or equity cash flow) equals NOI less capital expenditures and debt service obligations.

Question 2

Which ARGUS feature allows a user to model the impact of a single variable, such as market rent, across a range of values on IRR or value?

Accepted Answer

Sensitivity Analysis

Answer

Sensitivity Analysis in ARGUS tests how changes in a single input variable—like market rent or cap rate—affect key output metrics such as IRR.

Question 3

When a lease has a 'Base Stop' recovery structure in ARGUS, what does the base stop amount represent?

Accepted Answer

The expense level above which the tenant reimburses the landlord

Answer

A base stop is the per-square-foot expense threshold; any operating expenses above this level are passed through to the tenant.

Question 4

In ARGUS financial reports, 'Tenant Improvements' (TIs) are classified as:

Accepted Answer

Capital expenditures appearing below NOI

Answer

TIs are capital expenditures that appear below the NOI line, reducing cash flow available to investors but not included in NOI.

Question 5

What does the 'Effective Gross Revenue' (EGR) line represent in an ARGUS cash flow report?

Accepted Answer

Potential gross revenue minus vacancy and credit loss

Answer

EGR equals Potential Gross Revenue (PGR) less vacancy and credit loss, representing revenue actually collected from tenants.

(ASC) Argus Software Certification Practice Test