Humber College PREX-1060A Exam : Exam 4: Invigilated Theory Exam

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Humber College PREX-1060A Exam Syllabus Topics:

Humber College Exam 4: Invigilated Theory Sample Questions:

1. When discussing the sale of a business and establishing the asking price, there are questions a salesperson must ask the owner. Which of the following is one of them?

A) Is there any easement on the property?
B) Is the ownership of the building a corporation or a partnership?
C) What is the construction cost of the building?
D) Is inventory included in the sale of this business?

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

A) The buyer replaces the seller as the owner of the corporation.
B) 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.
C) The buyer is eligible for tax deductions and benefits by claiming capital cost allowance on depreciable property.
D) The buyer assumes all assets and accepts all liabilities of the business.

3. If a retail unit has a usable area of 3,482 sq. ft. with a conversion rate of 1.1235, what would the tenant's rentable area be?

A) The retail tenant's rentable area would be 3,482 sq. ft.
B) The retail tenant's rentable area would be 3,073 sq.ft.
C) The retail tenant's rentable area would be 3,912 sq.ft.
D) The retail tenant's rentable area would be 3,605 sq. ft.

4. Utility requirements are different for retail, office, and industrial properties, and a salesperson should understand the utility needs of each client. Which of the following items is NOT required bya typical occupant of a retail space?

A) A proper ventilation system
B) Sufficient lighting
C) A high voltage and ampere supply
D) A stable internet connection

5. A buyer is purchasing a farm and all the animals are included in the sale price. The buyer is worried the animals could become infected with disease prior to closing, so the salesperson inserts a clause in the agreement of purchase and sale to address that issue. Which of the following should NOT be included in the clause to protect the buyer?

A) State that the seller will continue the day-to-day farm operations until closing.
B) The number of animals based on type, gender, and health; if the number is not the same at closing, the price will be adjusted.
C) State that the buyer is assuming all animals on an "as is" basis.
D) A condition requiring a check-up of each animal by a predetermined veterinarian during due diligence.

Solutions: