Real Estate Math
A Wisconsin property owner wants to build a garage that costs $28,000. The appraiser estimates it will add $21,000 in value. This project illustrates the principle of:
AContribution (the improvement adds less value than its cost)✓ Correct
BSubstitution
CIncreasing returns
DHighest and best use
Explanation
The principle of contribution holds that an improvement's value to a property is what it contributes to market value, not what it costs to build. If the garage costs $28,000 but adds only $21,000 in value, the contribution is $21,000.
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