Property Valuation
Which type of depreciation in the cost approach refers to loss in value due to factors outside the property, such as a nearby industrial facility?
AA. Physical deterioration
BB. Functional obsolescence
CC. External (economic) obsolescence✓ Correct
DD. Deferred maintenance
Explanation
External obsolescence (also called economic obsolescence) results from factors outside the property, such as proximity to nuisances or adverse neighborhood changes, and is typically incurable.
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