Which of the Following Is One Reason That Construction Lenders

question 28

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

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Definitions:

Projecting

A defense mechanism where one attributes one's own unacceptable thoughts or feelings to others.

Identifying

The process of recognizing and labeling specific elements or characteristics as belonging to a certain category.

Sublimating

Sublimating is a defense mechanism proposed by Freud where negative urges and impulses are converted into socially acceptable behaviors.

Displacing

Redirecting emotional impulses from a primary target to a secondary target that is considered less threatening or more acceptable.