Property Valuation
An appraiser notes 'external obsolescence' in a North Dakota property located next to a newly built ethanol plant. This type of depreciation is:
ACurable physical deterioration
BIncurable, caused by negative external factors outside the property✓ Correct
CFunctional obsolescence due to poor floor plan
DShort-lived deterioration
Explanation
External obsolescence (also called economic obsolescence) is caused by factors outside the property, such as nearby industrial facilities, environmental concerns, or neighborhood decline. It is generally incurable because the property owner cannot correct the external condition.
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