SALESPERSON ONLINE COMPUTRAINER
Master Exam #3
Question 141 of 150
Question: A contractor was building a new home. Before completion, he received several offers to rent the property. Just before completion, the city announced that it was taking 10 feet off the front of the property to widen the street to facilitate traffic. Thereafter, offers to rent were for approximately 10% less. This would be an example of which of the following types of depreciation:
A: Straight line depreciation;
B: Physical deterioration;
C: Functional obsolescence;
D: Economic obsolescence.
Correct Answer is : D
It was the city's legislative action which caused the property to lose value. This would be economic obsolescence.