Property Valuation
Reproduction cost in the cost approach means:
AThe cost to build an equivalent structure using modern materials and techniques
BThe cost to build an exact replica using original materials and methods✓ Correct
CThe insurable replacement value set by the insurance company
DThe assessed value used for property tax purposes
Explanation
Reproduction cost is the cost to construct an exact replica of the subject building using the same materials, methods, and quality as the original. Replacement cost, by contrast, uses modern materials and techniques to build a functionally equivalent structure.
Related Tennessee Property Valuation Questions
- The 'principle of substitution' in real estate appraisal states that:
- Economic life of a building is defined as:
- Contributory value is the concept that:
- When appraising new construction, the cost approach is often most appropriate because:
- The principle of substitution states that:
- Capitalization rate (cap rate) is calculated as:
- The principle of progression states that a lower-value property benefits from proximity to higher-value properties by:
- Economic obsolescence (external obsolescence) is a loss in value caused by:
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