Property Valuation
In the cost approach to value, the formula for determining value is:
ALand value + Reproduction cost − Depreciation✓ Correct
BNet operating income ÷ Cap rate
CComparable sales price ± Adjustments
DGross rent × Gross rent multiplier
Explanation
The cost approach formula is: Land Value + Reproduction (or Replacement) Cost of Improvements − Accrued Depreciation = Indicated Value. Land value is estimated separately since land does not depreciate.
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