Property Valuation
In New Mexico, the 'cost to cure' approach to estimating depreciation applies when:
AExternal obsolescence exists
BThe depreciation is curable—the cost to fix the problem is less than or equal to the value it adds✓ Correct
CThe property has only physical deterioration
DLand value exceeds improvement value
Explanation
The cost to cure approach values curable depreciation at the cost needed to remedy it (since the cure adds at least as much value as it costs). Incurable depreciation is estimated by the capitalized loss in income or extraction method.
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