Property Valuation
An appraiser values a Fargo strip mall. The building's cost new is $1,200,000, physical depreciation is $180,000, functional obsolescence is $60,000, and the land value is $250,000. What is the indicated value by the cost approach?
A$1,010,000
B$1,210,000✓ Correct
C$1,350,000
D$1,450,000
Explanation
Depreciated value of improvements = $1,200,000 − $180,000 − $60,000 = $960,000. Total value = $960,000 + $250,000 (land) = $1,210,000.
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