SAEE SAEE - Cost Approach and Depreciation Questions and Answers 2

Question 1

When using the cost approach, which method calculates depreciation by assigning a specific percentage to each building component based on its observed condition?

Accepted Answer

Breakdown method

Answer

Age-life method

Answer

Market extraction method

Answer

Modified economic age-life method

Question 2

A commercial building has an effective age of 15 years and a total economic life of 60 years. Using the age-life method, what is the total depreciation percentage?

Accepted Answer

25%

Answer

30%

Answer

20%

Answer

15%

Question 3

Which type of depreciation is typically considered incurable because the property owner cannot control it?

Accepted Answer

External obsolescence

Answer

Functional obsolescence

Answer

Physical deterioration

Answer

Deferred maintenance

Question 4

In the cost approach, what does 'superadequacy' represent as a form of depreciation?

Accepted Answer

A building feature that exceeds market standards and does not contribute proportional value

Answer

A structural defect requiring immediate repair

Answer

Land value that exceeds the improvement value

Answer

A zoning restriction limiting highest and best use

Question 5

Which cost estimation method uses known costs of similar recently constructed buildings adjusted for differences?

Accepted Answer

Comparative unit method

Answer

Quantity survey method

Answer

Unit-in-place method

Answer

Index method

Question 6

An appraiser identifies $20,000 in curable physical deterioration, $15,000 in incurable physical deterioration, and $10,000 in external obsolescence. What is the total depreciation?

Accepted Answer

$45,000

Answer

$35,000

Answer

$30,000

Answer

$25,000