Property Valuation
What is entrepreneurial profit (incentive) in the cost approach to appraisal?
AThe builder's operating income
BThe return required by a developer to undertake the risk and expense of development✓ Correct
CThe profit from flipping properties
DTax incentives for development
Explanation
Entrepreneurial profit (incentive) is the return required by a developer/investor to undertake the risk, management, and expense of development. It is added to hard and soft costs in the cost approach to reflect total development cost.
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