In the cost approach, why is land always valued as if vacant and available for its highest and best use?

In the cost approach, why is land always

Multiple choice — select the best answer

ABecause land never depreciates and its cost always equals its value
BBecause the income approach cannot estimate land value separately
CBecause zoning always determines the highest and best use of land
DBecause land value must reflect its potential without the existing improvement so that depreciation can be applied only to the building

✓ Correct answer: D. Because land value must reflect its potential without the existing improvement so that depreciation can be applied only to the building Land is valued separately as though vacant so that all accrued depreciation can be properly identified and deducted from the improvement cost. Combining land and building would make it impossible to isolate building depreciation.

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