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A newly constructed building that represents the highest and best use of its site can be...

A newly constructed building that represents the highest and best use of its site can be worth less than its cost due to

  1. inflation
  2. appreciation
  3. physical deterioration
  4. functional obsolescence
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Answer #1

The correct answer is option c. physical deterioration

A newly constructed building that represents the highest and best use of its site can be worth less than its cost due to physical deterioration.

The building is susceptible to physical deterioration and hence it could be worth less than it costs

Options a and b are incorrect because inflation and appreciation causes the building to be worth more than the cost.

Option d is incorrect because the statement says the building represents the highest and best use of its site, so it is not functionally obsolesnence

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