Property Valuation
In the cost approach, 'accrued depreciation' encompasses which of the following?
AOnly physical deterioration
BPhysical deterioration, functional obsolescence, and external obsolescence✓ Correct
COnly functional and external obsolescence
DOnly depreciation claimed on federal income tax returns
Explanation
Accrued depreciation in the cost approach includes all forms of value loss: (1) physical deterioration (wear, tear, deferred maintenance), (2) functional obsolescence (outdated design/features), and (3) external/economic obsolescence (outside forces beyond the property).
Related North Carolina Property Valuation Questions
- A NC appraiser's use of 'comparables from the subject's immediate competitive market area' refers to:
- A capitalization rate in real estate is:
- The 'gross income multiplier' (GIM) using annual income for an NC commercial property is calculated as:
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- Paired sales analysis in the sales comparison approach is used to:
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- In the income approach, 'potential gross income' (PGI) assumes:
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