Property Valuation
What is 'depreciation' in the cost approach to appraisal and what are its three forms?
AThe accounting deduction on taxes; types are straight-line, MACRS, and bonus
BThe loss in value from any cause; three forms are physical deterioration, functional obsolescence, and external (economic) obsolescence✓ Correct
CThe decrease in value over time; types are normal, accelerated, and exceptional
DThe reduction in assessed value; types are age, condition, and location
Explanation
Appraisal depreciation is loss in value from any cause. Physical deterioration is wear and tear (curable or incurable).
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