Click this check box if you want all depreciation percentages applied to the Replacement Cost New. If you do not check this box, Residential Estimator subtracts physical depreciation from the Replacement Cost New, then multiplies functional depreciation percentage by the result. It then subtracts the functional depreciation from this value and multiplies the external depreciation percentage by that result. The following illustrates the calculations with and without this box checked (assuming each depreciation percentage is 10%):
|
|
Checked |
Not Checked |
|
Replacement Cost New |
$100,000 |
$100,000 |
|
Physical Depreciation (10%) |
10,000 |
10,000 |
|
RCN – Physical |
90,000 |
90,000 |
|
Functional Depreciation (10%) |
10,000 |
9,000 |
|
RCN – Physical – Functional |
80,000 |
81,000 |
|
External Depreciation (10%) |
10,000 |
8,100 |
|
Depreciated Cost |
70,000 |
72,900 |