Cost estimates are useful only in the cost approach to value
Cost estimates are useful only in the cost approach to value.
T F 2. The cost estimates used in appraisals should reflect cost levels on the date of value, instead of actual or historic costs.
T F 3. Replacement cost and reproduction cost are the same.
T F 4. The cost approach is often emphasized when estimating the value of new or nearly new property.
T F 5. The quantity survey method is the most practical and widely used method of estimating construction costs.
T F 6. The unit-in-place method of estimating costs is most often used as a supplement to refine the square-foot method.
T F 7. Direct cost elements include labor, materials, and design costs.
T F 8. Indirect cost elements should not be included in cost estimates.
T F 9. Increased floor area results in higher costs on a per-square-foot basis.
T F 10. Some cost manual services provide online computer access.
Chapter 12 Quiz
Circle T or F to indicate True or False as the better answer.
T F 1. Accrued depreciation can be defined in appraisal terms as the total loss in value from all causes.
T F 2. Economic obsolescence is caused by factors outside the property.
T F 3. Depreciation is usually classified as incurable if it is not economically feasible to correct the condition(s) causing the loss in value.
T F 4. A misplaced improvement suffers from functional obsolescence.
T F 5. Allowable deduction from book value is one of the four basic appraisal methods for measuring accrued depreciation.
T F 6. The sales data or market method is the most direct way to estimate loss in value.
T F 7. When you base your depreciation estimate on the “effective age” of the building rather than the actual age, you are attempting to estimate market’s view of the property.
T F 8. A gross income multiplier is used to estimate loss in value by the cost-to-cure method.
T F 9. The capitalized income method can be used to estimate either the amount of accrued depreciation from all causes, or that from a single cause.
T F 10. A 50-year-old building with a total life expectancy of 100 years should be depreciated at 50%, regardless of whether there is deferred maintenance and/or extensive updating.Cost estimates are useful only in the cost approach to value