REE 4103 CH 29: Calculate
A 30-year-old buidling with an effective age of 20 years has a total life expectancy of 50
years. How much depreciation has occurred?
A. 10%
B. 20%
C. 40%
D. 60% - ANS-40%
A property sold for $125,000 in a cash sale. It was 12 years old and had a site value of
$30,000. The reproduction cost of the building improvements was $102,350. What is the
amount of depreciation overall?
A. 6.50%
B. 7.18%
C. 7.56%
D. 8.85% - ANS-7.18%
Based on the data in the following example, what is the approximate average annual
rate of depreciation?
Apartment house sale price $450,000
Estimated site value $ 50,000
Estimated Reproduction cost $500,000
Effective age 20 years
A. 1.5% per year
B. 2.0% per year
C. 1.0% per year
D. 10% per year - ANS-1.0% per year
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
,Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The amount of depreciation for the HVAC, Plumbing, Lighting Fixtures, - ANS-20%,
16.7%, 16.7%, 20%, and 33.3% respectively
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The cost new of all items is:
, A. $251,700
B. $316,250
C. $300,000
D. - ANS-$316,250
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The cost new of all the long-lived items is:
A. $303,674
B. $252,250 - ANS-$252,250
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
A 30-year-old buidling with an effective age of 20 years has a total life expectancy of 50
years. How much depreciation has occurred?
A. 10%
B. 20%
C. 40%
D. 60% - ANS-40%
A property sold for $125,000 in a cash sale. It was 12 years old and had a site value of
$30,000. The reproduction cost of the building improvements was $102,350. What is the
amount of depreciation overall?
A. 6.50%
B. 7.18%
C. 7.56%
D. 8.85% - ANS-7.18%
Based on the data in the following example, what is the approximate average annual
rate of depreciation?
Apartment house sale price $450,000
Estimated site value $ 50,000
Estimated Reproduction cost $500,000
Effective age 20 years
A. 1.5% per year
B. 2.0% per year
C. 1.0% per year
D. 10% per year - ANS-1.0% per year
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
,Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The amount of depreciation for the HVAC, Plumbing, Lighting Fixtures, - ANS-20%,
16.7%, 16.7%, 20%, and 33.3% respectively
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The cost new of all items is:
, A. $251,700
B. $316,250
C. $300,000
D. - ANS-$316,250
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
750 square feet $75/sf cost to build
Screened porch:
400 square feet $25/sf cost to buid
Short-lived items:
HVAC $10,000 new effective age of 5 years life expectancy of 25 years
Plumbing Fixtures $20,000 new effective age of 5 years life expectancy of 30 years
Lighting Fixtures $15,000 new effective age of 5 years life expectancy of 30 years
Roof covering $12,000 new effective age of 5 years life expectancy of 25 years
Carpet/Vinyl $7,000 new effective age of 5 years life expectancy of 15 years
No Deferred Maintenance
Long-lived items - effective age of 5 years life expectancy of 70 years
Functional obsolescence - $5,000 in depreciation resulting from bad floor plan
External obsolescence - None.
Market Value of Land = $75,000
The cost new of all the long-lived items is:
A. $303,674
B. $252,250 - ANS-$252,250
Cost Approach:
Residence:
2,000 square feet $100/sf cost to build
Basement:
1,000 square feet $50/sf cost to build
Garage:
