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These 10 free ALC questions are organized by exam domain, so you can see how each part of the Accredited Land Consultant blueprint is tested. Reveal the answer and explanation under each question.
A sales-comparison worksheet lists a farm sale at $10,000 per acre. Unlike the subject, the sale property has transferable irrigation rights contributing $1,400 per acre. Its legal access is inferior to the subject's, warranting a $600-per-acre adjustment. No other differences require adjustment. The indicated value per acre for the subject is:
Correct answer: A - $9,200 per acre
A soil map labels most of a farm's tillable acreage 'IIIe.' The buyer treats the designation as a productivity score rather than a management limitation. In the USDA land capability system, IIIe indicates:
Correct answer: D - Severe erosion-related limitations that may require special conservation practices for cultivation.
Thirty-eight days after transferring U.S. investment land worth $1.5 million in a deferred Section 1031 exchange, an investor sends the qualified intermediary a signed, unambiguous identification of three separate U.S. investment properties. Their combined value is $4.8 million. No other properties were identified. The investor expects to acquire only one of the three within the exchange period. Is the identification valid under the property-count and value rules?
Correct answer: B - Yes; the three-property rule imposes no aggregate value ceiling.
On a GIS overlay, a fence and three neighboring fences appear about 12 feet east of the parcel lines. A current boundary survey places the subject's fence on the surveyed line and reconciles recovered monuments with the current recorded description. No discrepancy is found on the ground. Which explanation best fits the repeated offset?
Correct answer: A - A positional mismatch between the GIS parcel and imagery layers.
An investor can fund either of two mutually exclusive land acquisitions without borrowing. Both have comparable risk and five-year holding periods. At the investor's 10% required return, North Tract has an NPV of $85,000 and an IRR of 17%; South Tract has an NPV of $130,000 and an IRR of 14%. The investor's sole ranking objective is to add the most present dollar value. Which recommendation meets that objective?
Correct answer: C - Choose South because its higher NPV better satisfies the investor's value-maximization objective.
'The payments are identical, so the financing risks are identical.' A buyer makes this comparison between fixed-rate land loans with the same note rate, principal, and 25-year amortization schedule. One note matures in 7 years and the other in 25; neither promises renewal. Assuming timely payments and no prepayments, what is missing from the buyer's reasoning?
Correct answer: B - The 7-year note leaves a balloon balance requiring payoff or new financing.
First-year figures for a leased-farmland investment are $300,000 in initial cash equity, $84,000 in NOI, and $48,000 in debt service, including $18,000 of principal. A $12,000 capital improvement is paid from that year's cash flow. There are no additional contributions, reserve deposits, or other cash outlays. What before-tax cash-on-cash return remains after these payments?
Correct answer: C - 8.0%
The seller's farm income schedule includes both cash rent and the tenant's grain sales, then deducts seed, fertilizer, and harvesting costs. The tenant owns the crop, pays production expenses, and owes fixed rent under a lease that survives the sale. A passive buyer is purchasing the owner's interest, not the tenant's business. To establish the owner's NOI under that lease, what correction is needed?
Correct answer: C - Use lease rent less owner-paid operating expenses; exclude the tenant's farming business.
A 46-acre tract is being evaluated for its current highest and best use. Farming supports a present land value of $740,000. A legally permissible, physically feasible recreation facility supports $1.05 million after conversion costs and the required return. A warehouse is legally permissible and has a modeled $1.4 million residual, but requires 20 contiguous usable acres; engineering confirms only 14, with no feasible redesign. A retail model indicates $1.6 million, but an enforceable covenant prohibits retail use and removal is not reasonably probable. All values are on the same present-value basis. Which use does the evidence support?
Correct answer: B - Develop the recreation facility; it produces the highest value among the feasible alternatives.
A developer has final approval for a 30-lot first phase and a binding utility commitment serving 35 homes. Capacity for a later 25-lot phase is unsecured. The first phase exceeds the client's required return after covering the entire acquisition, shared infrastructure, and reserves for the retained land's carrying costs. The client is willing to buy on that basis and needs no later-phase receipts to meet financial obligations. Which recommendation follows from these facts?
Correct answer: D - Proceed on the first phase's merits; treat the later phase as contingent upside.
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