California Real Estate Practice Exam

If an appraiser wishes to measure the extent of accrued depreciation, he would rely upon which one of the following methods of calculation?

1. Cubic foot

2. Front foot

3. Square foot

4. Straight-line method

The correct answer is: Cubic foot

To measure the extent of accrued depreciation, the appropriate method is the straight-line method. This approach allows appraisers to estimate the depreciation of a property based on a systematic allocation over the useful life of the asset. The straight-line method is straightforward; it assumes that the property will lose value evenly over time until it reaches a point of no economic value or salvage value. Using this method encourages appraisers to focus on the age and condition of the property, along with any functional or external obsolescence that may affect its market value. It is commonly used in both residential and commercial property evaluations and provides an effective way of quantifying depreciation. Other methods mentioned, such as cubic foot, front foot, and square foot calculations, typically pertain to measuring dimensions or areas rather than assessing depreciation. These measurement methods are more appropriate for calculating the size of a property or for determining sales comparison adjustments, rather than directly evaluating the depreciation aspect. Thus, the straight-line method stands out as the correct choice for analyzing accrued depreciation.