Property Valuation
The principle of substitution, which underlies all three approaches to value, states that:
AA property's value increases with each improvement
BA buyer will pay no more for a property than the cost of obtaining an equally desirable substitute✓ Correct
CProperties appreciate in value over time
DGovernment assessments set market value
Explanation
The principle of substitution holds that a prudent buyer will not pay more for a property than the price of a comparable substitute property, forming the basis of the sales comparison, cost, and income approaches.
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