Which of the Following Is One Reason That Construction Lenders

question 27

Multiple Choice

Which of the following is one reason that construction lenders typically prefer the cost approach to valuation over the income approach?

• A)The cost approach provides a more conservative estimate of value
• B)The cost approach provides a more optimistic estimate of value
• C)The cost approach is a good indication of the expected value of an income-producing property once construction is complete and it has been leased-up
• D)The cost approach is a better estimate of actual market value of the project