Property Valuation
In the cost approach, 'replacement cost new' differs from 'reproduction cost new' in that:
AThey are identical terms
BReplacement cost uses current materials and standards; reproduction cost recreates the exact structure✓ Correct
CReplacement cost includes land value
DReproduction cost is always lower
Explanation
Reproduction cost recreates an exact duplicate of the structure using the same materials and methods. Replacement cost uses current equivalent materials and modern standards. Replacement cost is more commonly used in appraisal.
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