Property Valuation
When appraising a NJ property using the cost approach, the appraiser estimates replacement cost new and then deducts:
AOnly physical depreciation
BOnly economic obsolescence
CAccrued depreciation from all sources: physical, functional, and external✓ Correct
DThe original purchase price
Explanation
The cost approach requires estimating the current cost to reproduce or replace the improvements, then deducting all accrued depreciation—physical deterioration, functional obsolescence, and external (economic) obsolescence—to arrive at the depreciated value of improvements.
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