Property Valuation
In the cost approach, 'physical depreciation' is divided into which categories?
AA. Functional and external depreciation
BB. Curable (deferred maintenance) and incurable (long-lived items beyond economic repair)✓ Correct
CC. Short-term and long-term depreciation
DD. Structural and cosmetic depreciation
Explanation
Physical depreciation includes curable physical deterioration (deferred maintenance that is economically justifiable to fix) and incurable physical deterioration (items too costly to repair relative to value added, or structural deterioration).
Related Georgia Property Valuation Questions
- An appraisal is an opinion of value. In Georgia, residential appraisals for federally related transactions must be performed by:
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- A Georgia commercial property has potential gross income of $120,000, vacancy and credit loss of 8%, and operating expenses of $40,000. Using the income approach with a cap rate of 9%, what is the estimated value?
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- External (economic) obsolescence differs from functional obsolescence in that it is:
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