CAM Financial Analysis and Reporting 3

Question 1

Which of the following is NOT included when calculating Effective Gross Income (EGI)?

Accepted Answer

Mortgage principal payments

Answer

Laundry income

Answer

Late fees

Answer

Vacancy loss deduction

Question 2

A property's debt service is $200,000 annually and its NOI is $260,000. What is the Debt Service Coverage Ratio (DSCR)?

Accepted Answer

1.30

Answer

1.15

Answer

0.77

Answer

1.50

Question 3

In apartment accounting, a security deposit held in trust is recorded on the balance sheet as:

Accepted Answer

A liability

Answer

An asset

Answer

Revenue

Answer

An expense

Question 4

Which budgeting method requires every expense to be justified from zero each budget cycle rather than basing it on the prior year?

Accepted Answer

Zero-based budgeting

Answer

Incremental budgeting

Answer

Rolling budget

Answer

Capital budgeting

Question 5

An apartment property has 100 units at $1,000/month market rent and runs 5% vacancy. What is the annual EGI before other income?

Accepted Answer

$1,140,000

Answer

$1,200,000

Answer

$1,000,000

Answer

$1,100,000

Question 6

The break-even occupancy ratio tells a manager:

Accepted Answer

The minimum occupancy needed to cover all operating expenses and debt service

Answer

The occupancy level at which the property reaches maximum profit

Answer

The average occupancy rate over the past 12 months

Answer

The physical occupancy rate at the time of reporting

Question 7

Replacement reserves on an operating budget represent funds set aside for:

Accepted Answer

Major capital items that will eventually need replacement, such as HVAC or roofs

Answer

Monthly routine maintenance labor costs

Answer

Emergency repairs costing under $500

Answer

Owner distributions each quarter