Real Estate Math

A Kansas property has land valued at $45,000 and improvements valued at $135,000 (before depreciation of $22,500). What is the indicated value using the cost approach?

A$135,000
B$157,500✓ Correct
C$133,875
D$180,000

Explanation

Cost approach value = Land + Depreciated Improvements = $45,000 + ($135,000 - $22,500) = $45,000 + $112,500 = $157,500.

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