Suppose that an appraiser has just completed her analysis using the cost approach to valuation. She has determined that the market value of the subject property is $400,000. If the added value of the site was $80,000 and accrued depreciation amounted to $50,000, what was the reproduction cost of the building?
A) $270,000
B) $370,000
C) $430,000
D) $530,000

Question

Quizplus · Accepted Answer

According to the cost approach formula, the value of the subject property can be calculated as follows:
Reproduction cost of the building - Accrued depreciation + Added value of the site = Market value
Let's substitute the values we know in the formula:
Reproduction cost of the building - $50,000 + $80,000 = $400,000
Reproduction cost of the building = $370,000
Therefore, the correct answer is B, which is $370,000.

Suppose That an Appraiser Has Just Completed Her Analysis Using