Property Valuation
Accrued depreciation in the cost approach is calculated as:
AReplacement cost new minus land value
BReplacement cost new minus the present value of improvements
CThe sum of all three types of depreciation affecting the property✓ Correct
DOnly the age of the building divided by useful life
Explanation
Accrued depreciation is the total loss in value from all causes—physical deterioration, functional obsolescence, and external obsolescence—subtracted from replacement cost new to arrive at the depreciated value of improvements.
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