CAM Financial Analysis and Reporting 5

Question 1

An owner wants to compare their property's financial performance to similar properties in the market. Which benchmarking tool is most commonly used?

Accepted Answer

National Apartment Association (NAA) survey data or IREM income/expense analysis

Answer

The property's own prior-year budget

Answer

The local municipality's tax assessment records

Answer

The property's original pro forma from acquisition

Question 2

Which of the following situations would cause an UNFAVORABLE variance in the maintenance expense category?

Accepted Answer

An emergency roof repair costing $15,000 was not budgeted

Answer

A routine landscaping contract came in $200 under bid

Answer

Turnover painting was done in-house instead of contracted

Answer

Fewer work orders were submitted than anticipated

Question 3

A property manager is preparing a 12-month cash flow forecast. Which item should be excluded from the operating cash flow section?

Accepted Answer

Loan principal repayment

Answer

Water and sewer expense

Answer

Management fees

Answer

Landscaping contract

Question 4

The Internal Rate of Return (IRR) is used in apartment investment analysis primarily to:

Accepted Answer

Measure the annualized return that makes the net present value of all cash flows equal to zero

Answer

Calculate the monthly net operating income

Answer

Determine the property's market value using a cap rate

Answer

Project the break-even occupancy rate

Question 5

Which financial report would a manager review to determine the current outstanding balance of a resident's rent account?

Accepted Answer

Accounts receivable aging report

Answer

General ledger trial balance

Answer

Monthly income statement

Answer

Annual operating budget

Question 6

When reviewing a prior month's financial statement, a manager finds that insurance expense is $0 for the month but the annual premium has been paid. This is MOST likely because:

Accepted Answer

The annual premium was prepaid and recorded as a prepaid asset, with monthly amortization being absent or deferred

Answer

Insurance was cancelled for the month

Answer

The accountant made an error and the premium was not recorded

Answer

Insurance is only expensed in the month renewal is due

Question 7

A property manager is asked to present a 'T-12' report to a prospective buyer. This document contains:

Accepted Answer

Actual income and expense data for the trailing 12 months

Answer

A 12-year capital improvement projection

Answer

The property's 12-month operating budget for the next fiscal year

Answer

Tax returns for the past 12 years