Estimating the Land Value for an Improved Property Cannot Be

question 29

True/False

Estimating the land value for an improved property cannot be accomplished using the sales comparison method of valuation.

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Definitions:

Margin of Safety

The difference between actual sales and break-even sales, indicating the extent to which sales can drop before losses occur.

Variable Costs

Costs that vary directly with the level of production or volume of output.

Fixed Costs

Expenses that do not change in proportion to the level of production or sales activity within a certain range.

Plantwide Overhead Rate

A single rate used to allocate all of a plant's manufacturing overhead costs to its production activities based on a uniform cost-driver.