Property Valuation
The principle of anticipation holds that value is determined by:
AThe cost incurred to produce the property
BThe present value of anticipated future benefits✓ Correct
CComparable sales in the immediate area
DThe current replacement cost of improvements
Explanation
The principle of anticipation states that value equals the present value of the future benefits (income, enjoyment, proceeds of sale) that are expected to be derived from the property.
Related Arkansas Property Valuation Questions
- Which of the following most accurately describes 'market rent'?
- A property generates a net operating income of $30,000 per year. Using a capitalization rate of 6%, what is the indicated value?
- Regression is an appraisal principle that states:
- The principle of substitution states that a buyer will pay no more for a property than:
- Which appraisal principle holds that value is created by the expectation of future benefits?
- Economic life of an improvement refers to:
- An appraisal is different from a competitive market analysis (CMA) primarily because:
- The income approach to value is most commonly used to appraise:
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