COST APPROACH EXAM QUESTIONS WITH ANSWERS
the COST APPROACH involves_____ and is based on the______
-Involves estimation of reproduction or replacement cost of a property less accrued depreciation.
- Based on the proposition that the informed purchaser would pay no more than the cost of produc...
cost approach exam questions with answers the cost
Written for
Federal Taxation
All documents for this subject (63)
Seller
Follow
ACADEMICAIDSTORE
Reviews received
Content preview
COST APPROACH EXAM QUESTIONS WITH ANSWERS
the COST APPROACH involves_____ and is based on the______
-Involves estimation of reproduction or replacement cost of a property less accrued depreciation.
- Based on the proposition that the informed purchaser would pay no more than the cost of
producing a substitute property with the same utility as the subject property.
Reliability is affected by:
(2 things). and is especially applicable to:
1) reproduction or replacement cost data.
2) estimate of accrued depreciation.
-Single family residences
-Special use properties
-Special purpose properties
OR
Where when the structural improvements represent a major value contribution.
Step 1. in the COST APPROACH
1) Estimate land value as though vacant and available to be put to its highest and best use.
Step 2. in the COST APPROACH
2) estimate reproduction or replacement cost of structures as of the effective date of the appraisal.
Step 3. in the COST APPROACH
3) estimate accrued depreciation
Step 4. in the COST APPROACH
4) deduct depreciation from reproduction or replacement cost.
Step 5. in the COST APPROACH
5) add depreciated reproduction or replacement cost to the value of the land
BOOK DEPRECIATION=
An accounting term that refers to the amount of capital recapture written off on an owner's books.
Book depreciation is not market derived.
ECONOMIC LIFE=
The period of time over which improvements to real estate contribute to property value.
REMAINING LIFE=
The estimated period during which improvements continue to contribute to property value.
EFFECTIVE AGE=
The age indicated by the condition of a structure.
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller ACADEMICAIDSTORE. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $10.49. You're not tied to anything after your purchase.