# Reconciliation to Indicated Value by the Cost Approach

Instructions:

question 1 of 3

### The purpose of the cost approach is to determine _____.

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### 2. Joe has been asked to determine the replacement cost of a 2,800 square foot 21-year-old brick home on an 11,000 square foot lot. Joe estimated a replacement cost of the home to be \$48 per square foot and the lot value of \$2 per square foot. The average lifespan of a brick home is 60 years. Using the cost approach, what is the value of the home?

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The questions you'll be asked will test you on calculations, evaluation methods, and the purpose of the cost approach. Review your knowledge now and discover just what you remember.

## Quiz & Worksheet Goals

To pass the test you'll need good knowledge of:

• How to determine the best valuation method for a given example
• The meaning of reconciliation to indicated value
• Purpose of the cost approach
• Calculating the value of a property using the cost approach

## Skills Practiced

• Information recall - access the knowledge you've gained regarding the best valuation method for a given situation
• Problem solving - use acquired knowledge to solve cost approach calculations
• Interpreting information - verify that you can read information regarding the purpose of the cost approach and interpret it correctly