Property Valuation
A NH appraiser who uses the cost approach for a 50-year-old warehouse estimates depreciation using:
AOnly physical deterioration
BPhysical deterioration, functional obsolescence, and any applicable external obsolescence✓ Correct
COnly the age-life method
DZero depreciation since commercial buildings appreciate
Explanation
Total depreciation in the cost approach includes all three types: physical deterioration (wear), functional obsolescence (outdated design), and external obsolescence (outside forces). All applicable forms must be estimated.
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