Property Valuation
In the cost approach, what term describes the loss in value due to factors outside the property boundaries, such as a nearby industrial plant?
APhysical deterioration
BFunctional obsolescence
CExternal obsolescence✓ Correct
DIncurable depreciation
Explanation
External (economic) obsolescence is caused by factors outside the property itself, such as nearby nuisances, declining neighborhoods, or adverse economic conditions. It is generally incurable by the property owner.
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