- CFA Exams
- CFA Level I Exam
- Study Session 15. Alternative Investments
- Reading 39. Private Real Estate Investments
- Subject 4. The income valuation approach
CFA Practice Question
A house has a value of $400,000 as a house. It has a site value of $500,000 as a commercial lot, but the cost to demolish the house and prepare the site is $120,000. What is the house' market value?
A. $380,000
B. $400,000
C. $500,000
Explanation: The highest and best use of the house is to keep the existing residential use.
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