Given a sale price of $127,500 and a land value of $25,500, what is the replacement cost new less depreciation (RCNLD)?

Given a sale price of $127,500 and a land value of $25,500, what is the replacement cost new less depreciation (RCNLD)?

• A. $102,000
• B. $127,500
• C. $25,500
• D. $94,000

Answer: (A)

To arrive at the correct answer, it's essential to understand the components involved in the replacement cost new less depreciation (RCNLD) calculation. RCNLD is determined by taking the total cost to replace a property with a new structure and then subtracting any accumulated depreciation. In this case, we can infer the RCNLD based on the given sale price and land value. The sale price of the property is $127,500, and the value of the land (which does not depreciate) is $25,500. To find the improvement value (the value of the structure alone), you subtract the land value from the sale price: Improvement Value = Sale Price - Land Value Improvement Value = $127,500 - $25,500 Improvement Value = $102,000 This improvement value represents the replacement cost of the building itself, which we can consider indicative of the RCNLD in this context. Thus, the replacement cost new less depreciation in this instance is calculated to be $102,000, making it the correct answer.

To arrive at the correct answer, it's essential to understand the components involved in the replacement cost new less depreciation (RCNLD) calculation.

RCNLD is determined by taking the total cost to replace a property with a new structure and then subtracting any accumulated depreciation. In this case, we can infer the RCNLD based on the given sale price and land value.

The sale price of the property is $127,500, and the value of the land (which does not depreciate) is $25,500. To find the improvement value (the value of the structure alone), you subtract the land value from the sale price:

Improvement Value = Sale Price - Land Value

Improvement Value = $127,500 - $25,500

Improvement Value = $102,000

This improvement value represents the replacement cost of the building itself, which we can consider indicative of the RCNLD in this context. Thus, the replacement cost new less depreciation in this instance is calculated to be $102,000, making it the correct answer.