Property Valuation
The principle of contribution in real estate valuation states that:
AEach improvement adds its full cost to the property value
BThe value of a component is measured by its contribution to the total value of the property✓ Correct
CLarger properties always have higher values per acre
DAll components of a property are of equal value
Explanation
The principle of contribution holds that the value of any component (room addition, pool, garage) is determined by how much it contributes to the total value — not by its cost. Cost and contribution to value often differ.
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