A vacant lot sold for $184,000 and measures 80 by 115 feet. Its price per square foot is:
Correct Answer
D) 20 dollars per square foot
The rectangular lot contains 80 × 115 = 9,200 square feet. Its unit price is $184,000 ÷ 9,200 = $20.00 per square foot. Multiply the unit price back by area to check the result. Unitizing one sale does not establish that different-size parcels have identical unit values.
Why This Is the Correct Answer
Option D is correct because the lot contains 80 x 115 = 9,200 square feet, and $184,000 / 9,200 = $20.00 per square foot. Price per square foot is a standard unit of comparison for vacant land. Multiplying $20 x 9,200 returns $184,000, confirming the result.
Why the Other Options Are Wrong
Option A: 18.4 dollars per square foot
Option A, 18.4 dollars per square foot, results from dividing $184,000 by 10,000 square feet instead of the actual 9,200. The correct rate is $184,000 / (80 x 115) = $20.
Option B: 16 dollars per square foot
Option B, 16 dollars per square foot, results from dividing $184,000 by 11,500 square feet, as if the lot were 100 by 115 feet. The lot is 80 by 115, or 9,200 square feet, so the rate is $20.
Option C: 23 dollars per square foot
Option C, 23 dollars per square foot, results from dividing $184,000 by 8,000 square feet, as if the lot were 80 by 100 feet. The actual area is 9,200 square feet, giving $184,000 / 9,200 = $20.
Area first, then divide
Multiply the two dimensions to get area, then divide price by area; check by multiplying back.
How to use: Use this for any price-per-square-foot land calculation.
Exam Tip
Multiply your answer back by the area to confirm it reproduces the sale price.
Common Mistakes to Avoid
- -Miscalculating the lot area
- -Dividing area by price instead of price by area
- -Assuming parcels of different sizes have the same unit value
Concept Deep Dive
Analysis
This question tests basic unitizing of a land sale. Compute the area of the rectangular lot, then divide the sale price by that area. The wrong answers come from using an incorrect area.
Background Knowledge
Land sales are often unitized to compare parcels of different sizes. Common units include price per square foot, per acre, per front foot and per site; the appraiser selects the unit the market actually uses.
Real-World Application
An appraiser collects several residential lot sales of different sizes. Converting each to price per square foot lets the appraiser compare them before applying a supported rate to the subject lot.
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