The Cost Approach to Valuation Assumes the Market Value of a New

question 16

Multiple Choice

The cost approach to valuation assumes the market value of a new building is similar to the cost of constructing it today. Which of the following terms refers to the expenditure required to construct a building of equal utility using modern construction techniques, materials, and design that eliminates outdated aspects of the structure?

• A) Reproduction cost
• B) Replacement cost
• C) Fixed cost
• D) Variable cost

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Definitions:

Wernicke-Korsakoff Syndrome

A chronic disease related to alcohol dependence characterized by impaired memory and a loss of contact with reality.

Severe Malnutrition

An acute, life-threatening condition resulting from a significant deficiency of calories or nutrients.

Memory Loss

The inability to recall past events, information, or experiences, which can be temporary or permanent, and is often considered a symptom of various neurological or psychological conditions.

Alcohol Dependence

A health disorder defined by the diminished capacity to cease or regulate consumption of alcohol, notwithstanding negative impacts on social interactions, work, or physical well-being.