Real Estate Math

A Kansas property appraised at $185,000 has a replacement cost new of $175,000 for the improvements. The land value is $40,000. Depreciation is 15%. What is the indicated value using the cost approach?

A$179,250
B$188,750✓ Correct
C$189,250
D$191,250

Explanation

Depreciated improvement value = $175,000 × (1 - 0.15) = $175,000 × 0.

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