In property valuation for construction purposes, what does depreciation generally represent?
Correct answer: A. A reduction in value caused by age, wear, or obsolescence
- A. A reduction in value caused by age, wear, or obsolescence
- B. An increase caused by improved market demand
- C. The contractor's profit added to a measured item
- D. The temporary cost of mobilising site equipment
Explanation
Depreciation is the reduction in value of a building or asset due to physical deterioration, functional inadequacy, or economic obsolescence. It is distinct from contractor profit and temporary construction expenditure.
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About Construction Management and Estimation
Construction management covers planning, scheduling, resource control, contracts, procurement, site organisation, safety, quality assurance and project documentation. Estimation includes quantity take-off, rate analysis, bill preparation, valuation and cost control, with attention to the difference between direct and indirect costs and between an estimate, a tender and a final account.
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