Question

In the appraisal of an office building, which of the following would be classified as external depreciation?

a. termite damage to the structural components of the building

b. a poor architectural design resulting in a cluttered floor plan

c. an inadequate number of elevators and antiquated restroom facilities

d. a law requiring the building to be retrofitted with fire sprinklers

Answer 1

External depreciation in the appraisal of an office building can be caused by government regulations, such as the requirement to install fire sprinklers. Correct option is d.

Step-by-step explanation:

External depreciation refers to factors outside of the building's control that can decrease its value. From the options given, the correct answer would be d. a law requiring the building to be retrofitted with fire sprinklers.

This is because the government regulation of enforcing fire sprinklers would require additional expenses and changes to the building, resulting in a decrease in its value.