Property Valuation
In Minnesota, the cost approach uses reproduction cost vs. replacement cost. What is the difference?
AReproduction cost uses modern materials; replacement cost uses original materials
BReproduction cost is the cost to build an exact replica using today's materials and prices; replacement cost is the cost to build a functional equivalent using modern methods✓ Correct
CReplacement cost is always lower than reproduction cost
DBoth terms mean exactly the same thing
Explanation
Reproduction cost is the cost to construct an exact replica of the subject building using the same or similar materials, construction standards, and design. Replacement cost is the cost to build a functionally equivalent building using modern materials, techniques, and design.
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