Property Valuation
When using the age-life method to estimate accrued depreciation, the depreciation percentage is calculated by dividing effective age by:
AChronological age
BTotal economic life of the building✓ Correct
CRemaining economic life
DYears since the last major renovation
Explanation
Age-Life Method: Depreciation % = Effective Age ÷ Total Economic Life. For example, a building with 20-year effective age and 50-year total economic life has accrued depreciation of 20/50 = 40% of replacement cost.
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