Property Valuation
The principle of 'substitution' underlies which appraisal approach?
AThe income capitalization approach only
BAll three appraisal approaches✓ Correct
COnly the cost approach
DOnly the sales comparison approach
Explanation
The principle of substitution—that a buyer will not pay more for a property than the cost of acquiring an equally desirable substitute—underlies all three approaches: sales comparison (substitute comparable sales), cost (substitute new construction), and income (substitute other investments).
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