7.6.8.2 Cost/ Summation Approach

A. The cost or summation approach must consider all applicable forms of depreciation, functional, and external obsolescence. The cost/summation approach shall not automatically set the upper limit of value for these programs. The appraiser should provide a final reconciliation of the three approaches to value, and consider the basic principle of substitution in that no prudent purchaser would pay more for a project than the cost to acquire a similar site and construct improvements of equal desirability and utility. This approach may be eliminated at the discretion of the appraiser for subjects that are ten or more years old.