CFA® Level 1 Exam: False Definition of Appraisal

False Definition of Appraisal

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Which of the following definitions about appraisal is false?

A. The cost approach to valuation is based on what it would cost to rebuild the property at today's prices.

B. The comparative sales approach to valuation is based on the sales price of properties that are similar to the subject property.

C. The income approach to valuation projects the property's value as the present value of its future annual after-tax net operating income.

D. The "˜capitalization rate' equals the required rate of return minus the growth rate.

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A. B. C. D.

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