Property Valuation

An appraiser in Richmond applies the cost approach to a 20-year-old warehouse. Total reproduction cost new is $800,000 and land value is $150,000. Depreciation is estimated at 25%. What is the value indication?

A$600,000
B$750,000✓ Correct
C$700,000
D$650,000

Explanation

Depreciated cost = $800,000 × (1 – 0.25) = $600,000.

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