Real Estate Math
A Delaware property has land value of $95,000. The improvements have a replacement cost of $375,000, effective age of 10 years, and 40-year economic life. Using the cost approach, what is the estimated total property value?
A$376,250✓ Correct
B$470,000
C$281,250
D$375,000
Explanation
Depreciation = 10/40 = 25%. Depreciated Improvement Value = $375,000 × (1 − 0.25) = $375,000 × 0.75 = $281,250. Total Value = $95,000 + $281,250 = $376,250.
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