Property Valuation
Pennsylvania appraisers distinguish between 'reproduction cost' and 'replacement cost' in the cost approach. The difference is:
AReproduction cost is always higher than replacement cost
BReproduction cost = cost to build an exact replica; replacement cost = cost to build a functionally equivalent building using current materials and techniques✓ Correct
CThey are identical terms in Pennsylvania appraisal practice
DReplacement cost applies to commercial buildings; reproduction cost to residential
Explanation
Reproduction cost estimates the cost to construct an exact duplicate of the subject using the same materials and methods. Replacement cost estimates the cost to build a functionally equivalent building using current materials and standards. For older unique buildings, reproduction cost may be used; for most modern properties, replacement cost is preferred.
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