Humber College PREX-1060A

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Humber College Exam 4: Invigilated Theory Sample Questions:

1. A salesperson has a buyer client in the metal fabrication industry, which requires outdoor storage and involves substantial noise and smells. The salesperson sees a listing that says "24,000-square-foot light industrial property, multi-uses permitted." Is this a suitable property for their client? Why or why not?

A) Yes, the property is suitable, as the listing says the property is light industrial and multi-uses are permitted.
B) Yes, the property is suitable since the client is already in the metal fabrication business, and does not need to get any permits from the municipality prior to moving in and using the property.
C) Yes, the property will be suitable if the client states they will change the zoning to allow their type and classification of business to operate at this location.
D) No, the property is not suitable, as the client's business type and classification require heavy industrial zoning.

2. A salesperson is helping a buyer client to purchase a piece of vacant land to develop in the future. The salesperson recommends that the buyer consult with a third-party professional because the salesperson cannot provide the service with reasonable knowledge, skill, judgment, and competence. Which of the following is NOT a professional the salesperson would likely recommend to the buyer?

A) A zoning specialist in the city's planning department
B) A legal consultant who specializes in evicting residential tenants
C) An appraiser with Accredited Appraiser Canadian Institute (AACI) designation
D) A consultant in a financial institution

3. Which of the following is most likely to be a factor in an appraisal for an industrial property?

A) Price trend for detached homes in nearby neighborhoods
B) Access to raw materials used in the region
C) Proximity to museums and historical sites
D) Amount of advertising and publicity

4. Asset sale and share sale are two different ways to sell a business. Which statement describes an asset sale?

A) The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.
B) The buyer assumes all assets and accepts all liabilities of the business.
C) The seller benefits from a tax standpoint since any gain to the seller on the sale will be considered under the capital gains tax exemption.
D) The buyer replaces the seller as the owner of the corporation.

5. A tenant receives the keys to their new retail space. When the tenant opens the door, they see evidence of a small fire on the walls near the electrical panel. Which of the following is an appropriate recommendation the salesperson could provide to the new tenant?

A) Contact a lawyer and immediately start a legal action for damages.
B) Meet with the property manager, review the lease, and determine a course of action.
C) Repair the damage and deduct the cost from the rent.
D) Terminate the lease and start looking for a new space.

Solutions: