Property Valuation
The principle of substitution states that:
AThe value of a property is determined by its highest and best use
BA buyer will pay no more for a property than the cost to acquire an equally desirable substitute✓ Correct
CProperty values are influenced by surrounding land uses
DValue is created by the anticipation of future benefits
Explanation
The principle of substitution is the foundation of all three appraisal approaches: a rational buyer will pay no more for a property than the cost of acquiring a comparable substitute in the open market.
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