Property Valuation
In the cost approach, what is the formula for estimating value?
ALand value + Reproduction cost − Depreciation
BNet operating income ÷ Cap rate✓ Correct
CSales price × Market adjustment
DGross rent × Gross rent multiplier
Explanation
The cost approach formula is: Value = Land Value + Reproduction (or Replacement) Cost − Depreciation. It is often used for special-use or unique properties.
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