California Real Estate Practice Exam

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Study for the California Real Estate Exam. Engage with multiple choice questions and detailed explanations to sharpen your knowledge. Get ready to ace your real estate career!

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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.