Suppose that an appraiser has just completed her analysis using the cost approach to valuation. She has determined that the reproduction cost of the subject property is $370,000. If the added value of the site was $80,000 and accrued depreciation amounted to $50,000, what was the estimated value of the building using the cost approach?
A) $320,000
B) $370,000
C) $400,000
D) $500,000

Question

Quizplus · Accepted Answer

The estimated value of the building can be calculated by subtracting accrued depreciation from reproduction cost, which gives us $370,000 - $50,000 = $320,000. Adding the added value of the site ($80,000) to this gives us the value estimate of the subject property using the cost approach, which is $320,000 + $80,000 = $400,000. Therefore, the correct answer is C ($400,000).

Suppose That an Appraiser Has Just Completed Her Analysis Using