Real Estate Math
A building has a reproduction cost of $500,000. It has 20% physical depreciation. The land value is $80,000. What is the estimated total value?
A$400,000
B$420,000
C$460,000
D$480,000✓ Correct
Explanation
Depreciation = $500,000 x 20% = $100,000. Depreciated improvement value = $500,000 - $100,000 = $400,000. Total value = $400,000 + $80,000 (land) = $480,000.
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