FREE Appraisal Reviewer Valuation Analysis Questions and Answers
What is the key factor in the sales comparison approach?
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Wrong!
The sales comparison approach relies on recent, similar sales in the market to establish an asset’s value.
Why is depreciation considered in valuation analysis?
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Depreciation accounts for the loss in asset value due to age, wear and tear, and market conditions.
Which approach is commonly used to value income-generating properties?
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The income approach evaluates the present value of future cash flows to determine an asset’s value.
Why is the cost approach used in valuation analysis?
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The cost approach estimates value based on the cost of rebuilding an asset with similar materials and functions.
What is the primary objective of a valuation analysis?
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Valuation analysis determines the fair market value of an asset by considering various influencing factors.
Which factor most influences the market value of a property?
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Market demand significantly impacts a property's value, driven by factors like location, economic conditions, and buyer preferences.