Property ValuationIntermediateDelaware Exam
Which principle of value holds that value is created by the expectation of benefits to be received in the future?
APrinciple of substitution
BPrinciple of anticipationCorrect
CPrinciple of contribution
DPrinciple of conformity
Why Principle of anticipation Is Correct
Answer B: Principle of anticipation
The principle of anticipation holds that value is based on the expected future benefits of ownership (income, appreciation, utility). Appraisers estimate present value by discounting expected future benefits.
Exam Tip: Property Valuation
Valuation questions focus on the three approaches to value: sales comparison, cost, and income. Know which approach is best for which property type. The income approach uses cap rate and NOI — memorize these formulas.
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