Property Valuation
The cost approach to value estimates property value by:
AComparing recent sales of similar nearby properties
BCapitalizing the property's net operating income
CEstimating the cost to reproduce or replace the improvements, less depreciation, plus land value✓ Correct
DMultiplying the gross rent by a market-derived multiplier
Explanation
The cost approach calculates value as: land value + cost to reproduce or replace improvements (at current prices) minus accrued depreciation. It is most useful for new construction and special-use properties.
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