Property Valuation
The principle of CONTRIBUTION states that:
AThe value of a property is equal to the cost of its improvements
BThe value added by an improvement equals what it contributes to the overall value, not its cost✓ Correct
CAll properties contribute equally to neighborhood value
DImprovements must be approved before adding value
Explanation
The principle of contribution holds that the value of any component or improvement is measured by the amount it adds to the overall property value—not by what it cost. An improvement may cost $20,000 but add only $15,000 in value.
Related Arkansas Property Valuation Questions
- Which appraisal approach is most commonly used for appraising special-purpose properties such as churches or schools?
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