Property Valuation
The principle of substitution states that:
AA property's value depends on the values of neighboring properties
BA buyer will not pay more for a property than the cost of acquiring an equally desirable substitute✓ Correct
CLand values increase when improvements are made
DProperties reach their highest value when put to their highest and best use
Explanation
The principle of substitution is fundamental to all three approaches to value. It holds that a buyer will not pay more than the cost of acquiring or creating an equally desirable substitute property.
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