Property Valuation
The 'cost approach' to appraisal uses which formula?
ALand Value + Reproduction/Replacement Cost – Depreciation✓ Correct
BNet Operating Income ÷ Capitalization Rate
CSale Price of Comparables + Adjustments
DGross Rent Multiplier × Monthly Rent
Explanation
The cost approach formula is: Value = Land Value + Cost to Reproduce or Replace Improvements – Total Accrued Depreciation. Land is valued separately (land cannot be depreciated), and depreciation (physical, functional, and external) is subtracted from the improvement cost.
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