QUESTION 2

To illustrate the application of cost approach in property analysis, consider an old and historical residential property example. This reproduction cost is estimated with the unit comparison (per square foot) method. The unit method is also used to calculate the depreciation.

Table of cost approach: historical residential property example.

Property component	Reproduction Depreciation	Percent of depreciation	Depreciation Value (RM)	Market Value (RM)
Building 24 units Building: 30,000 sq ft @ 25 per sq ft	750,000	_____?	525,000	525,000
Site improvements: Utilities	6,000	5	5700
Paving Walkways Landscaping Outside lighting	12,000 2,000 3,000 1,000	20 15 0 15	9,600 1,700 3,000 850	_______?
Land Value: 5 acres @ 20,000 per acre				100,000
Indicated value from Cost approach				________?
Total Estimated value (rounded)				________?

1. Fill in the blank with the right value and illustrate the application of the cost approach, which considered an old and historic residential as mentioned above.

2. How did the process of fundamentals of cost approach exist?