Final answer:
The Cost approach (B) is used to estimate property values by considering the cost to replace improvements, adding the land value, and deducting depreciation.
Step-by-step explanation:
The method that estimates property value based on the replacement cost of improvements plus market value of the land, minus estimated depreciation is the B. Cost approach. In real estate appraisal, this approach considers how much it would cost to replace the building with a similar one if it were destroyed. The land on which the property sits is also considered, as it is not subject to depreciation. This cost is then adjusted for the age and condition of the property, which is referred to as depreciation.
The Cost approach is particularly useful for appraising specialized properties that aren't frequently sold, which makes it difficult to use the Sales Comparison Approach. However, it is less commonly applied to residential properties where there are many comparable sales available.