Suppose That an Appraiser Has Come to the Following Conclusions

question 28

Multiple Choice

Suppose that an appraiser has come to the following conclusions in evaluating the subject property. Due to the dramatic shift in the perceived safety of the neighborhood, values of any residential properties in the area of the subject property have fallen by $10,000, on average. Due to the subject property's age, physical deterioration to the building accounts for an estimate of $50,000 in lost value. An evaluation of the floor plan reveals that it is quite obsolete relative to current homebuyer preferences. This has a detrimental effect on the value of the property that is estimated to be approximately $15,000. Based on your understanding of adjustments related to accrued depreciation, which of the following pertains to the adjustment for external obsolescence?

• A) $10,000
• B) $15,000
• C) $50,000
• D) $75,000

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Definitions:

Insurance Premium

The amount of money charged by an insurance company for coverage, calculated based on the risk profile of the insured entity or property.

Insurance Company

A financial institution that provides various types of insurance policies to protect individuals and businesses against risk.

Low Risk

Investments or activities characterized by a minimal likelihood of losing financial or physical assets.

High Deductible

A health insurance policy with a higher out-of-pocket cost before coverage begins, often resulting in lower premiums.