The Cost Approach to Valuation Assumes the Market Value of a New

Multiple Choice

The cost approach to valuation assumes the market value of a new building is similar to the cost of constructing it today. Which of the following terms refers to the expenditure required to construct a building of equal utility using modern construction techniques, materials, and design that eliminates outdated aspects of the structure?

A) Reproduction cost
B) Replacement cost
C) Fixed cost
D) Variable cost