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Cost ApproachEASY13.6% of exam

Which scenario most strongly supports giving the cost approach substantial weight?

Correct Answer

A) New or special-use property, reliable costs, and weak sales or income data

Substantial cost reliance is supported when site, cost and depreciation inputs are reliable and the approach is applicable relative to weaker alternatives. Newness or special use alone does not guarantee reliability. Neither highest indication nor a property label determines weight.

Answer Options
A
New or special-use property, reliable costs, and weak sales or income data
B
Sixty-year-old cottages located in dense and active resale markets
C
Condominium units in active towers with plenty of recent unit resales nearby
D
Any assignment where the cost approach gives the highest figure

Why This Is the Correct Answer

Substantial cost reliance is supported when site, cost and depreciation inputs are reliable and the approach is applicable relative to weaker alternatives. Newness or special use alone does not guarantee reliability. Neither highest indication nor a property label determines weight.

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