Deck 12: Estimating Loss in Value: Accrued Depreciation

Question 1

A gross income multiplier is used to estimate loss in value by the cost-to-cure method.

Answer 1

False

Question 2

A misplaced improvement suffers from functional obsolescence.

Answer 2

True

Question 3

A 50-year-old building with a total life expectancy of 100 years should be depreciated at 50%, regardless of its effective age.

Answer 3

False

Question 4

Depreciation is usually classified as incurable if it is not economically feasible to correct the condition(s) causing the loss in value.

Question 5

The capitalized income method can be used to estimate either the amount of accrued depreciation from all causes, or that from a single cause.

Question 6

When you base your depreciation estimate on the "effective age" of the building rather than the actual age, you are relying on an estimate of the market's view of the property.

Question 7

Economic obsolescence is caused by factors outside the property.

Question 8

Allowable deduction from book value is one of the four basic appraisal methods for measuring accrued depreciation.

Question 9

The sales data or market method is the most direct way to estimate loss in value.

Question 10

Accrued depreciation can be defined in appraisal terms as the total loss in value from all causes.