Property Valuation
What is 'cost approach' and when is it most applicable in Rhode Island?
AEstimating value based on income; most applicable for apartments
BEstimating value as land value plus depreciated cost of improvements; most applicable for new construction, special-use properties, or when comparable sales are scarce✓ Correct
CEstimating value by comparing similar sales; most applicable for single-family homes
DEstimating value based on tax assessments
Explanation
The cost approach estimates value as the land value plus the cost to reproduce or replace improvements minus depreciation. It is most applicable for new construction, special-purpose properties (churches, schools), or where comparable sales are limited.
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