Owner converted master bedroom into 'granny flat' costing $50,000 but adding $30,000 value. Later, kitchen remodel cost $15,000 but added $20,000 value. Which statement is correct?

Option A is incorrect because neither improvement demonstrates decreasing returns. Decreasing returns would occur when each additional dollar invested yields progressively less value, which isn't the case here. The kitchen remodel actually provided a better return per dollar than the granny flat.

Option B is incorrect because the granny flat does not exemplify progression. Progression occurs when improvements significantly increase value beyond their cost. Here, the granny flat cost $50,000 but added only $30,000 value, resulting in a net loss rather than progression.

Option C is incorrect because the kitchen remodel does not exemplify regression. Regression occurs when improvements actually decrease property value, which is not the case here. The kitchen remodel increased value by $5,000 more than its cost.