LICEO DE CAGAYAN UNIVERSITY

Rodolfo N. Pelaez Blvd., Kauswagan, Cagayan de Oro City

REM 109 – Appraisal & Assessment in the Government Sector

SEMI FINAL EXAM

1. What is the primary legal basis for real property appraisal and assessment for
taxation purposes in the Philippines?
a) The Constitution of the Philippines
b) Republic Act No. 7160 (Local Government Code of 1991)
c) Presidential Decree No. 1383
d) The National Internal Revenue Code of 1997
2. According to the fundamental principles, at what value should real property be
appraised?
a) Historical cost
b) Replacement cost
c) Current and fair market value
d) Assessed value
3. What is the primary basis for classifying real property for assessment purposes?
a) The size of the property
b) The location of the property
c) The actual use of the property
d) The zoning regulations of the local government unit
4. Which of the following is NOT a fundamental principle in the appraisal and
assessment of real property?
a) Uniform classification within each local government unit
b) Assessment based on the property's highest potential use
c) Prohibition of private involvement in the appraisal and collection process
d) Equitable distribution of the tax burden
5. How is the value of a rectangular lot within the standard depth calculated?
a) Multiplying the base unit value by the lot's perimeter
b) Multiplying the base unit value by the lot's area
c) Dividing the base unit value by the lot's area
d) Adding the base unit value to the lot's area

6. The Stripping Method is used to appraise which type of property?

a) All urban lands
b) Commercial and industrial properties
c) Residential lands exceeding the standard depth
d) Corner lots
7. Which of the following is a factor considered in the Stripping Method?
a) Distance from the street frontage
b) Topography of the land
c) Shape of the lot
d) Proximity to public transportation
8. How are corner lots valued in urban areas?
a) Using the same method as interior lots
b) Applying a percentage increment based on the street with the highest value
c) Multiplying the base unit value by the lot's perimeter
d) Considering the value of the alley or callejon adjacent to the lot

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Rodolfo N. Pelaez Blvd., Kauswagan, Cagayan de Oro City

9. The value of roads or streets in urban subdivisions is based on:

a) The size of the subdivision
b) The number of houses in the subdivision
c) The cost of cementing, asphalting, or paving
d) The value of the surrounding properties
10. How is the adjustment value for frontage applied to commercial lots?
a) By multiplying the lot's depth by 50% of the unit base value
b) By multiplying the lot's frontage by 50% of the unit base value
c) By dividing the lot's frontage by 50% of the unit base value
d) By adding 50% of the unit base value to the lot's area
11. Which of the following factors is NOT specifically mentioned as a value
adjustment in the SFMV?
a) Shape of the lot
b) Topography of the land
c) Blighted status of the land
d) Proximity to schools and hospitals
12. How is the value of a rear (interior) rectangular lot determined?
a) By multiplying the base unit value by the lot's area
b) By subtracting the value of a hypothetical rectangular lot from the combined
value
c) By applying the Stripping Method
d) By using the same method as a triangular lot with its base on the street
13. To find the value of a triangular lot with its base on the street, you should:
a) Multiply the base unit value by the lot's area
b) Take two-thirds of the value calculated as a rectangular lot
c) Take one-third of the value calculated as a rectangular lot
d) Apply the Stripping Method
14. How is the value of a trapezoidal lot determined?
a) By applying the Stripping Method
b) By taking two-thirds of the value calculated as a rectangular lot
c) By computing the values of the rectangular and triangular portions separately

d) By using the same method as a triangular lot with its apex on the street
15. What is the controlling value for a lot in an urban area, regardless of its actual
use?
a) The base unit value of the lot
b) The value of the surrounding properties
c) The established unit value in the SFMV along the street
d) The value determined by the local assessor
16. How is the market value of agricultural land determined?
a) By multiplying the unit base value per hectare by the lot's area
b) By considering the historical cost of the land
c) By applying the Stripping Method
d) By using the same method as urban lands
17. What factors are considered in the adjustment of the market value of
agricultural land?
a) The type of road along the property and the location of the property
b) The size of the property and the type of crops planted
c) The historical cost of the land and the current market value
d) The zoning regulations of the local government unit

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Rodolfo N. Pelaez Blvd., Kauswagan, Cagayan de Oro City

18. How is the distance of a property from all-weather roads measured?

a) From the center of the property
b) From the corner of the lot nearest to the road
c) From the nearest point on the road to the property
d) From the property line to the road
19. Which of the following is NOT considered an all-weather road?
a) National road
b) Provincial road
c) Municipal road
d) Dirt road
20. What is the percentage adjustment for agricultural land located over 6
kilometers from an all-weather road?
a) -2%
b) -4%
c) -6%
d) -8%
21. What is the main principle behind the Extraction Procedure?
a) Comparing the subject property to similar properties that have recently sold.
b) Estimating the cost of constructing a new building on the land.
c) Subtracting the depreciated value of improvements from the total property
value.
d) Analyzing the income generated by the property.
22. Which of the following is a limitation of the Extraction Procedure?
a) It is only applicable to agricultural lands.
b) It is less reliable than the direct comparison approach.
c) It does not consider the value of improvements.
d) It is not applicable to urban lands.
23. What is the Ground Rent Capitalization Procedure particularly effective for?
a) Appraising agricultural lands.
b) Appraising properties with no recent sales data.
c) Appraising properties in central business district (CBD) core areas.
d) Appraising properties with a high vacancy rate.
24. What is the main factor that influences the reliability of the Ground Rent
Capitalization Procedure?
a) The accuracy of the property's income estimate.
b) The availability of recent sales data.
c) The size of the property.
d) The location of the property.
25. What is the primary document required for the appraisal of untitled property?
a) A certified true copy of the title
b) A survey plan prepared by a licensed geodetic engineer
c) An affidavit of ownership
d) A tax declaration
26. What is the primary principle behind the Extraction Procedure?
a) Comparing the subject property to similar properties that have recently sold.
b) Estimating the cost of constructing a new building on the land.
c) Subtracting the depreciated value of improvements from the total property
value.
d) Analyzing the income generated by the property.
27. Which of the following is a limitation of the Extraction Procedure?
a) It is only applicable to agricultural lands.
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Rodolfo N. Pelaez Blvd., Kauswagan, Cagayan de Oro City

b) It is less reliable than the direct comparison approach.

c) It does not consider the value of improvements.
d) It is not applicable to urban lands.
28. What is the Ground Rent Capitalization Procedure particularly effective for?
a) Appraising agricultural lands.
b) Appraising properties with no recent sales data.
c) Appraising properties in central business district (CBD) core areas.
d) Appraising properties with a high vacancy rate.
29. What is the main factor that influences the reliability of the Ground Rent
Capitalization Procedure?
a) The accuracy of the property's income estimate.
b) The availability of recent sales data.
c) The size of the property.
d) The location of the property.
30.What is the primary document required for the appraisal of untitled property?
a) A certified true copy of the title
b) A survey plan prepared by a licensed geodetic engineer
c) An affidavit of ownership
d) A tax declaration
31. What document is required to confirm that the land is within the alienable and
disposable area?
a) A survey plan
b) A tax declaration
c) A certification from the CENRO
d) An affidavit of ownership
32. What document is required from the owner/administrator of untitled property?
a) A certified true copy of the title
b) A survey plan
c) An affidavit of ownership and/or sworn statement declaring the market value

d) A certification from the barangay captain

33. What is the purpose of the ocular inspection/investigation report by the
assessor?
a) To verify the property's boundaries.
b) To assess the condition of the property.
c) To determine the property's market value.
d) To identify the owner of the property.
34. What document is required for the appraisal of titled property?
a) A survey plan
b) A tax declaration
c) A certified true copy of the title
d) An affidavit of ownership
35. What is the primary requirement for a building to be considered immovable
property?
a) It must be located on the owner's land.
b) It must be made of permanent materials.
c) It must be substantially adhered to the land.
d) It must be registered with the local government.
36. What document is required for the appraisal of buildings?
a) A certified true copy of the title
b) A survey plan
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c) A copy of the approved building permit

d) An affidavit of ownership
37. What is the SBUCC used for?
a) To determine the market value of a building.
b) To determine the base unit construction cost of a building.
c) To determine the depreciation rate of a building.
d) To determine the zoning regulations for a building.
38. What is the main consideration when appraising a two-storey building used for
both residential and commercial purposes?
a) The size of the building
b) The location of the building
c) The principal or predominant use of the building
d) The age of the building
39. How are historical or vintage buildings appraised?
a) Using the same method as modern buildings
b) Using a specialized appraisal method
c) Using the Stripping Method
d) Using the Extraction Procedure
40. What are the two main approaches commonly used in the appraisal of
machinery and equipment?
a) The Cost Approach and the Income Approach
b) The Market Approach and the Cost Approach
c) The Sales Comparison Approach and the Income Capitalization Approach
d) The Extraction Procedure and the Ground Rent Capitalization Procedure
41. What are Direct Costs in the appraisal of machinery and equipment?
a) Costs related to the installation and acquisition of the entire property.
b) Costs directly related to the acquisition and installation of the unit.
c) Costs related to the maintenance and repair of the equipment.
d) Costs related to the operation of the equipment.
42. What are Indirect Costs in the appraisal of machinery and equipment?
a) Costs directly related to the acquisition and installation of the unit.
b) Costs related to the installation and acquisition of the entire property.
c) Costs related to the maintenance and repair of the equipment.
d) Costs related to the operation of the equipment.
43. What is the formula for estimating Reproduction Cost New (RCN) for imported
machinery?
a) RCN = Original Cost x Current Exchange Rate x Trending Factor
b) RCN = Original Cost x Local Index
c) RCN = Original Cost x Depreciation Rate
d) RCN = Original Cost x Market Value
44. What is the formula for estimating Reproduction Cost New (RCN) for locally
manufactured machinery?
a) RCN = Original Cost x Current Exchange Rate x Trending Factor
b) RCN = Original Cost x Local Index
c) RCN = Original Cost x Depreciation Rate
d) RCN = Original Cost x Market Value
45. What is the primary basis for the appraisal of machinery for tax purposes?
a) The market value of the machinery
b) The replacement cost of the machinery
c) The actual cost to the owner
d) The depreciated value of the machinery
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46. What is the depreciation allowance for machinery as per the Local Government
Code?
a) 10% per year
b) 5% per year
c) 2% per year
d) 1% per year
47. What is the minimum remaining value for machinery after depreciation?
a) 10% of its original cost
b) 20% of its original cost
c) 30% of its original cost
d) 40% of its original cost
48. How is the market value of rail-tracks (e.g., MRT) determined?
a) Using the Extraction Procedure
b) Using the Ground Rent Capitalization Procedure
c) Using the Cost Approach or the Income Approach
d) Using the Sales Comparison Approach
49. How are transmission lines, transmission towers, and cell sites assessed for tax
purposes?
a) They are assessed as real property.
b) They are assessed as machinery.
c) They are assessed as intangible assets.
d) They are exempt from taxation.
50.How are submerged pipelines for natural gas, water, etc., appraised?
a) Using the Extraction Procedure
b) Using the Ground Rent Capitalization Procedure
c) Using the Cost Approach or the Income Approach
d) Using the Sales Comparison Approach

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