Property Valuation
External (economic) obsolescence as a form of depreciation is BEST described as:
ADeterioration caused by deferred maintenance
BLoss in value due to factors outside the property's boundaries, such as nearby industrial development or neighborhood decline✓ Correct
COutdated design features within the building
DDepreciation calculated on the foundation of the building
Explanation
External (or economic) obsolescence is caused by factors outside the property itself — such as a nearby highway, industrial plant, economic decline in the area, or a drop in demand. This type of depreciation is typically incurable because the owner cannot control external factors.
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