Real Estate Math

A Florida appraiser uses the cost approach on a home. Land value = $80,000; construction cost new = $240,000; accrued depreciation = $36,000. What is the estimated value?

A$284,000✓ Correct
B$320,000
C$204,000
D$276,000

Explanation

Cost approach value = Land Value + (Cost New − Accrued Depreciation) = $80,000 + ($240,000 − $36,000) = $80,000 + $204,000 = $284,000.

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