Property Valuation
Reproduction cost new and replacement cost new are two methods used in the cost approach. The difference is that:
AReproduction cost uses current materials and design; replacement cost uses original materials
BReproduction cost uses exact duplicate materials and design; replacement cost uses modern materials and design to provide equivalent utility✓ Correct
CThey are identical methods with different names
DReplacement cost applies only to historic structures
Explanation
Reproduction cost new is the cost to build an exact replica using the same materials and design (including any outdated features). Replacement cost new is the cost to build a structure with equivalent utility using modern materials and design. Most appraisers use replacement cost for practicality.
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