Property Valuation
The principle of substitution states that:
AA property's value is determined by future benefits it will produce
BA buyer will pay no more for a property than the cost to acquire a comparable substitute✓ Correct
CValue is created by supply and demand
DProperty values conform to surrounding properties
Explanation
The principle of substitution is the foundation of the sales comparison and cost approaches: an informed buyer will pay no more for a property than the cost to obtain a property of equal utility.
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