A single-family home was developed five years ago in Neighborhood X and the owner would like to estimate the value of the property. Due to the lack of comparables in the local market, the owner relies on the cost approach for valuation. Based on the information below, what is the estimated value of the property based on the cost approach? (choose the closest answer) • The living area costs $300,000 to replace as new (material cost and labor cost) . Cost of garage and patio adds up to $50,000 Physical depreciation is 10 percent of the replacement cost . There is no functional or external obsolescence . The land value is $200,000 and site improvement is worth 50,000 . 350,000 540,000 565,000 600,000

A single-family home was developed five years ago in Neighborhood X and the owner would like to estimate the value of the property. Due to the lack of comparables in the local market, the owner relies on the cost approach for valuation. Based on the information below, what is the estimated value of the property based on the cost approach? (choose the closest answer) • The living area costs $300,000 to replace as new (material cost and labor cost) . Cost of garage and patio adds up to $50,000 Physical depreciation is 10 percent of the replacement cost . There is no functional or external obsolescence . The land value is $200,000 and site improvement is worth 50,000 . 350,000 540,000 565,000 600,000

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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