Property Valuation
When using the cost approach, functional obsolescence refers to:
APhysical deterioration from normal wear and tear
BLoss of value due to factors outside the property
CLoss of value due to outdated or inadequate design features✓ Correct
DDepreciation caused by environmental contamination
Explanation
Functional obsolescence is a loss of value caused by outdated or inadequate design features, such as an outdated floor plan, insufficient electrical capacity, or lack of modern amenities.
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