ValuationAppraisal_methodsMEDIUM
Under the cost approach to appraisal, value is calculated as:
Correct Answer
B) Replacement cost minus depreciation plus land value
The cost approach estimates property value by calculating the cost to replace or reproduce the improvements, subtracting accrued depreciation, and then adding the estimated land value. The formula is: Value = Replacement Cost - Depreciation + Land Value.
Answer Options
A
Recent comparable sales prices adjusted for differencesB
Replacement cost minus depreciation plus land valueC
Net operating income divided by the capitalization rateD
Assessed value multiplied by the local tax rateWhy This Is the Correct Answer
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Why the Other Options Are Wrong
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Deep Analysis of This Valuation Question
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Background Knowledge for Valuation
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Real World Application in Valuation
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Common Mistakes to Avoid on Valuation Questions
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Related Topics & Key Terms
Related Topics:
replacement costreproduction costaccrued depreciationland valuespecial-use properties
Key Terms:
cost approachreplacement costdepreciationland valuespecial-use property
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