Cost Approach, also known as Depreciation Replacement Cost Method: It estimates the value of the property based on the cost expected to be incurred in order to rebuild similar development on the underlying land after adjusting the specific parameters, including depreciation, age, nature of the building, etc.
Where:
- Replacement Cost: Cost expected to be incurred in order to rebuild similar development
- Land Value: Can be arrived through Market Approach
- Depreciation: Depreciated value of the building
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