Final answer:
The correct answer is C. Functional obsolescence. Functional obsolescence can be economically fixed by making improvements or renovations that increase the property's value.
Step-by-step explanation:
The correct answer to the question is C. Functional obsolescence. Functional obsolescence refers to a form of physical deterioration or obsolescence that can be economically remedied, as the cost of repair or improvement is less than the expected increase in property value.For example, if a house has an outdated layout that does not meet the needs of modern buyers, it can be remodeled to improve its functionality and increase its value.Unlike incurable depreciation (option A), which refers to physical deterioration that cannot be economically fixed, functional obsolescence can be addressed through improvements or renovations. External obsolescence (option B) refers to factors outside the property itself, such as changes in the neighborhood or surrounding areas, that negatively affect its value. Amortization (option D) relates to the process of gradually reducing or paying off a debt over a fixed period.