Property Valuation
What is 'replacement cost new' versus 'reproduction cost new' in the cost approach?
AThey are identical terms with no practical difference
BReproduction cost new is the cost to build an exact replica of the structure using the same materials and methods; replacement cost new is the cost to build a functionally equivalent structure using current materials and methods — replacement cost is more commonly used in modern appraisal✓ Correct
CReproduction cost is for residential; replacement cost is for commercial
DReplacement cost is always lower than reproduction cost in Nevada
Explanation
Reproduction cost is the cost to construct an exact duplicate using identical materials and methods — relevant for historic structures where replication is important. Replacement cost is the cost to build a functional equivalent using current materials, standards, and methods — more practical and commonly used in standard appraisals. In Nevada, replacement cost is the standard for the cost approach. For properties with period architectural details (Arts & Crafts, Mid-Century Modern in Las Vegas), the distinction can matter.
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