Property Valuation
The replacement cost in Michigan's cost approach represents:
AThe original cost of constructing the building
BThe cost to build a functionally equivalent substitute structure using current materials and standards✓ Correct
CThe current market value of the land only
DThe insured value of the structure
Explanation
Replacement cost is the cost to construct a building with equal utility using current materials, techniques, and design standards — not necessarily an exact replica of the existing structure.
Related Michigan Property Valuation Questions
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