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Questions and Answers
The cost approach is premised primarily on the principle of __________, which states that an informed buyer will not pay more to build a property than the cost of a similar property with equal utility.
The cost approach is premised primarily on the principle of __________, which states that an informed buyer will not pay more to build a property than the cost of a similar property with equal utility.
Costs that occur on the construction site are considered __________ costs.
Costs that occur on the construction site are considered __________ costs.
The first step in the cost approach is to __________.
The first step in the cost approach is to __________.
Building A contains 10,000 square feet and is 130' x 100'. Building B contains 10,000 square feet and is 50' x 200'. Will it cost more to build Building A or Building B?
Building A contains 10,000 square feet and is 130' x 100'. Building B contains 10,000 square feet and is 50' x 200'. Will it cost more to build Building A or Building B?
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Architectural fees, insurance, and title expenses are considered __________ and are sometimes called soft costs.
Architectural fees, insurance, and title expenses are considered __________ and are sometimes called soft costs.
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__________ is the cost of producing an exact replica of a building or improvement.
__________ is the cost of producing an exact replica of a building or improvement.
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__________ is the cost of producing a building or improvement using modern methods and materials with the same utility.
__________ is the cost of producing a building or improvement using modern methods and materials with the same utility.
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Building A was constructed 20 years ago at a cost of $400,000. The index 20 years ago was 200, and the current index is 350. The reproduction cost new for Building A would be $________.
Building A was constructed 20 years ago at a cost of $400,000. The index 20 years ago was 200, and the current index is 350. The reproduction cost new for Building A would be $________.
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Cost components such as the floor or roofing are considered __________ costs and are expressed as cost per square foot.
Cost components such as the floor or roofing are considered __________ costs and are expressed as cost per square foot.
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The easiest, fastest, and most widely used method of estimating cost is the _______________ method.
The easiest, fastest, and most widely used method of estimating cost is the _______________ method.
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The comparative-unit method is the easiest, fastest, and most widely used method of estimating costs by applying a cost per unit of area or volume.
The comparative-unit method is the easiest, fastest, and most widely used method of estimating costs by applying a cost per unit of area or volume.
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The difference between the market value of an improvement and its cost at the time of appraisal is termed __________.
The difference between the market value of an improvement and its cost at the time of appraisal is termed __________.
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The five methods of measuring depreciation are:
The five methods of measuring depreciation are:
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Property B sold for $180,000 with an estimated land value of $80,000. The RCN for the improvement is $200,000. Depreciation is _______ percent.
Property B sold for $180,000 with an estimated land value of $80,000. The RCN for the improvement is $200,000. Depreciation is _______ percent.
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Curable physical deterioration is measured by __________.
Curable physical deterioration is measured by __________.
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__________ obsolescence is a loss in value due to a deficiency, modernization, or super adequacy within the structure.
__________ obsolescence is a loss in value due to a deficiency, modernization, or super adequacy within the structure.
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___________ obsolescence is a loss in value resulting from a decrease in utility and desirability caused by factors outside the property's boundaries.
___________ obsolescence is a loss in value resulting from a decrease in utility and desirability caused by factors outside the property's boundaries.
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Incurable physical deterioration is measured by the ___________.
Incurable physical deterioration is measured by the ___________.
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If a depreciation table started at 0 percent and went to 40 percent, a percent good table would start at _______ and go to _______.
If a depreciation table started at 0 percent and went to 40 percent, a percent good table would start at _______ and go to _______.
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Which method of estimating depreciation is the most detailed? Its use is required in the writing of demonstration appraisal reports.
Which method of estimating depreciation is the most detailed? Its use is required in the writing of demonstration appraisal reports.
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An item classified as a short-lived item has a cost new of $5,000. Its actual age is 5 years, and its total useful life is 20 years. The dollar amount of depreciation would be ________.
An item classified as a short-lived item has a cost new of $5,000. Its actual age is 5 years, and its total useful life is 20 years. The dollar amount of depreciation would be ________.
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A two-story residence has only one bath, which is located on the second floor. If a second bath had been included on the first floor when the residence was originally constructed, the RCN would be $11,500. The cost to install (cure) the second bath today would be $13,500.
The amount of functional obsolescence would be ________.
A two-story residence has only one bath, which is located on the second floor. If a second bath had been included on the first floor when the residence was originally constructed, the RCN would be $11,500. The cost to install (cure) the second bath today would be $13,500. The amount of functional obsolescence would be ________.
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A residence is located on a street that has become a very busy thoroughfare. It rents for $800 per month. Residences not located on the busy street rent for $825 per month. The ORM for this area is 150, and the land-to-building ratio is 1:4. The indicated amount of external obsolescence is ________.
A residence is located on a street that has become a very busy thoroughfare. It rents for $800 per month. Residences not located on the busy street rent for $825 per month. The ORM for this area is 150, and the land-to-building ratio is 1:4. The indicated amount of external obsolescence is ________.
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A residence has an RCN of $200,000. Items classified as curable physical deterioration have an RCN of $10,000 and a cost to cure of $12,000. Incurable physical deterioration (short-lived items) have an RCN of $40,000 and a depreciation amount of $18,000. The actual age for the residence is 6 years, and the total useful life is 60 years. The total amount of physical deterioration for the residence would be $_______.
A residence has an RCN of $200,000. Items classified as curable physical deterioration have an RCN of $10,000 and a cost to cure of $12,000. Incurable physical deterioration (short-lived items) have an RCN of $40,000 and a depreciation amount of $18,000. The actual age for the residence is 6 years, and the total useful life is 60 years. The total amount of physical deterioration for the residence would be $_______.
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If the cost to cure a functional deficiency within a residence exceeds the increase in value added to the property, it is called ____________ functional obsolescence.
If the cost to cure a functional deficiency within a residence exceeds the increase in value added to the property, it is called ____________ functional obsolescence.
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