For a residence with an RCN of $200,000, curable physical deterioration RCN of $10,000 and cost to cure of $12,000, and $18,000 depreciation for incurable physical deterioration, what is the total amount of physical deterioration?

To find the total amount of physical deterioration for the residence, we must consider both curable and incurable physical deterioration.

Curable physical deterioration refers to repairs that can be made to restore the property's value. In this scenario, although the curable physical deterioration has a replacement cost new (RCN) of $10,000, it costs $12,000 to cure. However, when calculating physical deterioration, we typically consider the actual RCN related to the curable deteriorations, which is $10,000.

Incurable physical deterioration is the value lost due to aspects of the property that cannot be easily rectified. Here, the incurable physical deterioration is reported as $18,000.

To calculate the total amount of physical deterioration, we sum the values of both curable and incurable deterioration:

• Curable physical deterioration = $10,000

• Incurable physical deterioration = $18,000

Total physical deterioration = $10,000 (curable) + $18,000 (incurable) = $28,000.

It appears there may be a misunderstanding in the problem framing or quoted answer, as the combined total of $28,000 does not match the provided choice A ($45,000). It