Property Valuation
The principle of 'contribution' in real estate appraisal means that:
AEach improvement adds its full construction cost to the property value
BThe value of a component is measured by how much it contributes to the total property value✓ Correct
CAll parties to a joint venture contribute equally to the project
DA property's value is the sum of its individual parts
Explanation
The principle of contribution holds that the value of any component is measured by its contribution to the total property value — not by its cost to install. For example, a $50,000 pool addition may add only $20,000 to market value if that is what buyers are willing to pay for it.
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