Replacement cost pricing exam questions with 100% correct answers(graded A+) 2024

The cost approach to pricing is often used when comparables are not available The most likely approach to pricing which would be used for a school or fire station is the cost approach The approach to pricing which is based on what it costs to replace the improvements is the cost approach The cost of replacing a building with a precise duplicate of the original building is the reproduction cost The cost of replacing a building with on that performs the same function but is not an exact replica is the replacement cost Most cost pricing is done using the replacement cost Replacement cost approach is based on what formula? VALUE OF LAND + REPLACEMENT COST - DEPRECIATION (based on improvements only) = ESTIMATED PRICE In the cost approach, the estimated replacement cost is reduced by the depreciation In the cost approach, the value of land is added to the replacement cost In the cost method of valuation, the depreciation is calculated for the improvements only The best approach to determining the price of the land using the replacement cost approach to valuation is to do a sales comparison using comparables If adequate data are not available to do a sales comparison analysis, the next best way to estimate the price of land when using the replacement cost approach is valuation to ask one or more builders for an estimate The method for determining the replacement cost for a building that is used most often, but which is the least accurate is the square foot method The method for determining the replacement cost for a building which is the most accurate but the most difficult is the quantity survey Physical deterioration, functional obsolescence, and economic obsolescence are types of depreciation The wear and tear that comes from age and normal use is a type of depreciation called physical deterioration Broken windows that need replacing are an example of a type of depreciation called physical deterioration A reduction in value due to outdated features of the property itself is a type of depreciation called functional obsolescence A three story house with a steep narrow staircase is an example of a type of depreciation called functional obsolescence Depreciation due to physical deterioration or functional obsolescence arises from forces within the property Economic obsolescence arises form forces outside the property Depreciation resulting from normal wear and tear can be estimated using a method called the cost to repair When the need arises to estimate depreciation from functional or economic obsolescence, you should consult your broker