Sales comparison indicates $340,000 and the cost approach indicates $392,000. By what percentage do they diverge, measured against the lower indication?
Correct Answer
A) 15.3%
Why this is correct: Calculation: ($392,000 - $340,000) / $340,000 = 15.3%. Why the other choices are wrong: 13.3% divides by the higher indication, which understates any gap and answers a different question; 7.6% halves the difference; 52.0% reports the dollar gap in thousands rather than a percentage.
Why This Is the Correct Answer
Why this is correct: Calculation: ($392,000 - $340,000) / $340,000 = 15.3%. Why the other choices are wrong: 13.3% divides by the higher indication, which understates any gap and answers a different question; 7.6% halves the difference; 52.0% reports the dollar gap in thousands rather than a percentage.
More Reconciliation Questions
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What does it mean that a value opinion must be reasonable rather than merely arithmetically derived?
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