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

Industry surveys from NAA and IREM provide expense-per-unit and income benchmarks by property type and region.

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

An unbudgeted emergency repair increases actual spending above the budgeted amount, creating an unfavorable variance.

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

Loan principal repayment is a financing activity, not an operating expense, and falls below the NOI line.

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

IRR identifies the discount rate at which the present value of future cash flows equals the initial investment, expressing return as an annualized percentage.

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

The accounts receivable aging report lists outstanding balances by resident and shows how long each balance has been owed.

(CAM) Certified Apartment Manager Practice Test

(CAM) Certified Apartment Manager Practice Test

CAM Financial Analysis and Reporting 5