A property sold for $315,000. The improvements had a replacement cost new of $240,000 and accrued depreciation of $90,000. What land value does extraction indicate?
Correct Answer
C) $165,000
Depreciated improvement contribution is $240,000 − $90,000 = $150,000. Subtract it from $315,000 to obtain $165,000 for land. The sale and improvement estimate must refer to matching property rights and condition; that compatibility is assumed in this calculation.
Why This Is the Correct Answer
Depreciated improvement contribution is $240,000 − $90,000 = $150,000. Subtract it from $315,000 to obtain $165,000 for land. The sale and improvement estimate must refer to matching property rights and condition; that compatibility is assumed in this calculation.
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