Property Valuation
In the cost approach, the term 'reproduction cost' means:
AThe cost to build a building with modern materials that has similar utility
BThe cost to construct an exact replica of the subject building using the same materials and methods✓ Correct
CThe cost to repair existing damage
DThe land value minus depreciation
Explanation
Reproduction cost is the cost to build an exact duplicate of the existing structure using the same or equivalent materials, design, and workmanship at current prices. Replacement cost, by contrast, uses modern materials of similar utility.
Related Alabama Property Valuation Questions
- The principle of progression in real estate means that:
- In an appraisal using the cost approach, the term 'reproduction cost' means:
- Effective gross income (EGI) for an investment property is calculated as:
- In the sales comparison approach, a comparable property that sold for more than the subject property due to a superior feature would require:
- An appraiser who uses paired sales analysis is attempting to:
- The principle of increasing and decreasing returns states that adding more improvements to a property:
- When appraising a property using the income approach, stabilized NOI is used rather than actual current NOI because:
- The principle of substitution states that:
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