Property Valuation
In a cost approach appraisal, the 'reproduction cost' differs from 'replacement cost' in that:
AA. Reproduction cost uses current materials and methods; replacement cost uses original materials
BB. Reproduction cost estimates the cost to build an exact duplicate using original materials; replacement cost estimates the cost to build a functionally equivalent structure using current methods✓ Correct
CC. They are the same thing
DD. Replacement cost is always higher than reproduction cost
Explanation
Reproduction cost is the cost to build an exact replica using the same materials and methods as the original. Replacement cost is the cost to build a functionally equivalent structure using modern materials and methods. Replacement cost is more commonly used in appraisals since exact reproduction may not be practical.
Related Colorado Property Valuation Questions
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