Humber College Exam 4: Invigilated Theory Sample Questions:

1. In regard to cash flow into and out of a business, which of the following is correct?

A) Operating cash flow is used when determining yield on an investment property, while sales proceeds cash flow is not used for this purpose.
B) Sales proceeds cash flow is used when determining yield on an investment property, while operating cash flow is not used for this purpose.
C) Operating cash flow can be positive or negative.
D) Sales proceeds cash flow does not affect investor decisions.

2. An office building is being sold. The agreement of purchase and sale includes multiple conditions that protect the buyer. Each condition has a different expiry date, and they will be fulfilled and completed at different times. The conditions do not have waiver provisions. In this situation, all conditions can be removed by:

A) Serving one waiver
B) Serving one notice of fulfillment
C) Serving separate notices of fulfillment
D) Serving separate waivers

3. A salesperson, who is representing a tenant, has completed a comparative market analysis (CMA) of the management fees charged, assessed on a square footage basis, at the different office buildings that their client is interested in leasing. The management fees vary across the comparable office buildings, and the tenant is interested to know why there is a difference. Which of the following is an accurate statement the salesperson can make about the difference in management fees between the buildings?

A) The salesperson should identify the reasons for high management fees charged for a building and determine the relative value it provides.
B) The salesperson should tell the tenant that the Condominium Authority of Ontario regulates management fees charged by buildings as per their size.
C) The salesperson should tell their client that higher management fees charged for a building always indicates that the tenant is getting superior service and value.
D) The salesperson should explain that a tenant occupying a smaller rentable area in a building pays higher management fees per square foot compared to a tenant with an average or larger rentable area.

4. What should a salesperson do if they are unable to secure documentation to verify the usable and rentable areas of a property?

A) Use a laser measuring tool to take the measurements and use the R/U factor to calculate the figures
B) Use a laser measuring tool to take the measurements
C) Use the R/U factor to calculate the figures
D) Recommend that the landlord obtain the professional services of a measuring company to obtain the figures

5. When a farm is sold, there are exemptions to the payment of harmonized sales tax (HST). In which of the following circumstances is a farmer responsible to pay HST to the Canada Revenue Agency (CRA)?

A) The farm has been used for personal use.
B) The farm is sold to a corporation and the HST is included in the selling price.
C) The farmer sells the farm to a relative.
D) The farmer uses a smaller portion of the farm for a residence.

Solutions: