Property Valuation
In Michigan, 'reproduction cost' in the cost approach differs from 'replacement cost' because:
AThey are identical terms
BReproduction cost estimates the cost to build an exact replica; replacement cost estimates the cost to build a functionally equivalent structure using current materials and methods✓ Correct
CReplacement cost is always higher than reproduction cost
DReproduction cost uses current labor costs; replacement cost uses historical costs
Explanation
Reproduction cost is the cost to build an exact duplicate of the subject using the same materials and methods; replacement cost is the cost to build a functionally equivalent structure using current materials and building standards. For older or unusual properties, these may differ significantly.
Related Michigan Property Valuation Questions
- In Michigan, 'market value' as used in appraisal is defined as:
- Effective gross income (EGI) for a rental property is calculated as:
- In Michigan, an appraisal must be performed by a licensed or certified appraiser for federally related transactions when the loan amount exceeds:
- In Michigan, 'assessed value' for property tax purposes is typically set at what percentage of market value?
- In Michigan appraisal, 'highest and best use' is defined as:
- Michigan's Board of Review allows property owners to appeal their:
- In Michigan, 'market value under duress' (distress value) is typically:
- In Michigan, 'value in use' differs from 'market value' because it:
Practice More Michigan Real Estate Questions
1,500+ questions covering all exam topics. Start free — no signup required.
Take the Free Michigan Quiz →