California Real Estate SalespersonProperty Valuation and Financial AnalysisHard
An appraiser is calculating total accrued depreciation for a property using the cost approach. The reproduction cost new is $400,000. The appraiser identifies $40,000 in physical deterioration, $15,000 in functional obsolescence, and $10,000 in external obsolescence. What percentage of the reproduction cost new does the total accrued depreciation represent?
- A16.25%
- B20%
- C13.75%
- D10%
Show answer & explanationAnswer & explanation
Correct answer: A. 16.25%
Total accrued depreciation = $40,000 + $15,000 + $10,000 = $65,000. Percentage = $65,000 ÷ $400,000 = 16.25%.
Why the other options are wrong
- B. Overstates the combined depreciation percentage.
- C. Incorrect division result.
- D. Understates the combined depreciation total.
Total Accrued Depreciation
The sum of all forms of depreciation (physical, functional, and external) subtracted from reproduction/replacement cost new to reach depreciated value.
- Three types: physical, functional, external
- Total depreciation = sum of all three types
- Percentage = Total depreciation ÷ Cost new
Memory trick: Add all three losses, then compare to cost new