Property Valuation

A Missouri appraiser using the cost approach determines the replacement cost new is $280,000 and total depreciation is $40,000. The land value is $60,000. What is the indicated value?

A$220,000
B$240,000
C$280,000
D$300,000✓ Correct

Explanation

Cost approach value = (Replacement cost new − Depreciation) + Land value = ($280,000 − $40,000) + $60,000 = $240,000 + $60,000 = $300,000.

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