Property Valuation
The principle of contribution in real estate appraisal states that:
AAll property improvements add their full cost to value
BThe value of a component is measured by how much it contributes to the total value of the property, not by its cost✓ Correct
CProperties always appreciate in value
DMarket conditions determine value independently of property features
Explanation
The principle of contribution holds that the value of any improvement is measured by the amount it adds to the overall property value, not by the cost of the improvement itself. A pool costing $40,000 might add only $20,000 in value.
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