Property Valuation
The principle of substitution states that:
AA property's value is determined solely by what it cost to build
BA buyer will pay no more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CThe highest and best use determines value
DValue is created by the anticipation of future benefits
Explanation
The principle of substitution is foundational to all three approaches to value: a rational buyer will not pay more for a property than the cost of acquiring a comparable substitute (similar property, building new, or investing elsewhere).
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