Which describes extraction as distinct from applying a land-to-total allocation ratio?
Correct Answer
A) Subtracting the depreciated improvement value from an improved sale price
Extraction deducts supported depreciated improvement contribution from a compatible improved-property price. Allocation applies a supported land-to-total value ratio. The approaches differ in their inputs; either can be unreliable if its contribution estimate or market ratio is unsupported.
Why This Is the Correct Answer
Extraction deducts supported depreciated improvement contribution from a compatible improved-property price. Allocation applies a supported land-to-total value ratio. The approaches differ in their inputs; either can be unreliable if its contribution estimate or market ratio is unsupported.
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