Property Valuation
An Arizona appraiser using the cost approach estimates the value of a home as follows: land value = $80,000; replacement cost new of improvements = $220,000; accumulated depreciation = $30,000. What is the estimated value?
A$270,000✓ Correct
B$300,000
C$190,000
D$250,000
Explanation
Cost approach value = Land value + (Replacement cost new − Accumulated depreciation) = $80,000 + ($220,000 − $30,000) = $80,000 + $190,000 = $270,000.
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