Question

The cost approach formula states that reproduction or replacement cost new _________________, __________________ equals property value.

Answer 1

minus depreciation,

plus site value

Step-by-step explanation:

In real estate also, when charging for depreciation the depreciation is not charged on land value.

Here, site value means the value of land.

All the accrued depreciation has to be considered for this purpose.

This formula basically emphasises on the fact that if the total value of a property is not provided, it can be calculated based on the values of different parts of the property, as including value of building, total depreciation, value of land provided separately.