Property Valuation
Economic life of an improvement differs from physical life in that it is:
AAlways longer than physical life
BThe period during which the improvement contributes positively to the property's value✓ Correct
CThe number of years until the building physically falls apart
DDetermined solely by construction materials used
Explanation
Economic life is the period during which improvements continue to contribute positively to the property's value. It may be shorter than physical life—a building may still stand physically but no longer contribute to value.
Related Arkansas Property Valuation Questions
- Direct capitalization in the income approach converts income into value by:
- In an appraisal, an adjustment for a comparable sale that is SUPERIOR to the subject property results in:
- External obsolescence in property valuation is caused by:
- Depreciation in the cost approach refers to:
- The principle of 'substitution' in real estate appraisal states that:
- Which type of depreciation is caused by factors OUTSIDE the property, such as a nearby highway being constructed?
- External obsolescence (economic obsolescence) is caused by:
- The principle of progression in real estate valuation states that:
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