SRA Cost Approach & Depreciation Analysis 2

Question 1

The quantity survey method of cost estimation is considered which of the following?

Accepted Answer

The most comprehensive and most time-consuming cost estimating method

Answer

The quantity survey method is the most detailed cost estimating approach, requiring itemization of every material and labor component, making it the most accurate but also the most time-consuming.

Question 2

A 'superadequacy' in the context of functional obsolescence refers to:

Accepted Answer

A feature that exceeds what the current market demands, resulting in a cost that cannot be fully recouped in value

Answer

A superadequacy is an excess feature whose cost to include exceeds its contribution to market value, creating functional obsolescence because the market will not pay for the over-improvement.

Question 3

In the cost approach, how is land value treated?

Accepted Answer

It is estimated separately and then added to the depreciated cost of improvements

Answer

In the cost approach, land is valued separately (typically via the sales comparison approach) and added to the depreciated improvement cost to arrive at total property value.

Question 4

Which best describes 'incurable' physical deterioration?

Accepted Answer

Physical deficiencies where the cost to remedy exceeds the value the cure would add to the property

Answer

Incurable physical deterioration exists when the cost to correct the deficiency is greater than the resulting increase in property value, making repair economically unjustified.

Question 5

The unit-in-place method estimates building costs by:

Accepted Answer

Pricing each major building component separately to include both material and installation costs

Answer

The unit-in-place method prices each major component of the structure—foundation, framing, roofing, mechanical systems, etc.—separately to capture both material and labor costs for each element.

SRA - Senior Residential Appraiser Practice Test

SRA - Senior Residential Appraiser Practice Test

SRA Cost Approach & Depreciation Analysis 2