California Real Estate Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Study for the California Real Estate Exam with confidence. Engage with interactive questions designed to enhance your understanding of real estate principles, laws, and practices. Prepare thoroughly for your licensing test and ensure you have the knowledge to succeed in your real estate career!

Practice this question and more.

A building has a replacement cost of $150,000 and an estimated economic life of 50 years. What is the annual amount of depreciation?

$3,000
$2,500
$1,500
$4,000

The correct answer is: $3,000

The annual amount of depreciation is calculated by dividing the replacement cost by the estimated economic life. In this case, $150,000 divided by 50 years equals $3,000 per year. This means that each year, the building will depreciate by $3,000. The other options are incorrect because they either do not accurately calculate the annual depreciation amount or do not take into account the estimated economic life of the building. Option B overestimates the depreciation amount, while options C and D underestimate it. Therefore, the correct answer is option A.