Property Valuation
The principle of contribution in appraisal means:
AEach improvement adds its full cost to total property value
BThe value of a component is measured by what its addition or removal contributes to total property value✓ Correct
CAll improvements depreciate at the same rate
DThe income approach contributes the most to final value
Explanation
The principle of contribution holds that a component's value equals what it adds (or what its removal would subtract) from total property value. An improvement's value contribution may be more or less than its cost.
Related Arkansas Property Valuation Questions
- The concept of 'plottage' refers to:
- External obsolescence (economic obsolescence) is caused by:
- Market value is defined as:
- An appraiser is required to be an 'independent, disinterested third party.' This means the appraiser:
- Transferable development rights (TDRs) affect property valuation because they:
- Net operating income (NOI) is calculated as:
- The principle of PROGRESSION states that:
- A leased fee interest represents:
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