What is the appropriate use of a published cost service in the cost approach?
Correct Answer
C) As a source requiring local adjustment and judgment
Why this is correct: Published cost services provide general data that must be adjusted for local conditions, quality class, and specific property features through the appraiser's judgment. Why the other choices are wrong: They are not a substitute for local market analysis. They cannot be the sole support for depreciation without analysis. They must not be adopted without examination. Exam tip: Cost service figures are starting points requiring local adjustment and professional judgment.
Why This Is the Correct Answer
Why this is correct: Published cost services provide general data that must be adjusted for local conditions, quality class, and specific property features through the appraiser's judgment. Why the other choices are wrong: They are not a substitute for local market analysis. They cannot be the sole support for depreciation without analysis. They must not be adopted without examination. Exam tip: Cost service figures are starting points requiring local adjustment and professional judgment.
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