Property Valuation
In the cost approach, the formula is: Value = Land Value + Depreciated Cost of Improvements. If a property has a land value of $95,000, replacement cost new of $320,000, and total accrued depreciation of 25%, the indicated value is:
A$335,000✓ Correct
B$415,000
C$284,750
D$350,000
Explanation
Depreciation = $320,000 × 25% = $80,000. Depreciated improvements = $320,000 − $80,000 = $240,000. Value = $95,000 + $240,000 = $335,000.
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