Question

It cost approximately $350,000 to build a house and its various improvements on a parcel of property. If the property was vacant, undeveloped land, it would be worth about $100,000. As it currently exists, the property's physical deterioration equals about $60,000. If an appraiser were to apply the cost approach, what would be the value of this property?A.) $250,000
B.) $390,000
C.) $450,000
D.) $480,000

Answer 1

Answer:

B. $390,000

Explanation:

Land Value + (Cost New – Accumulated Depreciation) = Property Value

100,000 + (350,000 - 60,000) = Property Value

100,000 + 290,000 = Property Value

$390,000 = Property Value