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GFOA CPFO Exam - Topic 7 Question 102 Discussion

A building with a replacement value of $1,000,000 has depreciated by 50%. What amount of risk has been unwittingly assumed?
C) $600,000
A) $500,000
B) $550,000
D) None of these

GFOA CPFO Exam - Topic 7 Question 102 Discussion

Actual exam question for GFOA's CPFO exam
Question #: 102
Topic #: 7
[All CPFO Questions]

A building with a replacement value of $1,000,000 has depreciated by 50%. What amount of risk has been unwittingly assumed?

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Suggested Answer: C

by Kent at Oct 21, 2024, 12:16 AM

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Rory
9 months ago
Actually, it could be more if you factor in other costs.
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Lauran
9 months ago
Totally agree, it’s definitely $500,000!
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Lavonne
10 months ago
Wait, are we sure about that? Seems too simple.
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Myra
10 months ago
So, if it's depreciated by 50%, that’s $500,000.
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Pansy
10 months ago
The building's replacement value is $1,000,000.
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Brynn
10 months ago
I practiced a similar question where we had to calculate risk based on depreciation, and I think the answer is definitely $500,000.
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Noel
10 months ago
I feel like I might be mixing up the concepts here. Is it just the replacement value minus depreciation, or is there more to it?
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Adelaide
11 months ago
I think the risk assumed is the amount of depreciation, so it should be $500,000, right? That seems like a common practice question.
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Rocco
11 months ago
I remember something about depreciation and how it affects risk, but I'm not sure if it's just the depreciated value or something more.
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Jaclyn
11 months ago
I'm pretty confident that the answer is $500,000. The building has depreciated by 50%, so the remaining value is $500,000. The risk that has been unwittingly assumed is the other $500,000 that the building has lost in value.
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Sommer
11 months ago
Okay, let's break this down step-by-step. The building has a replacement value of $1,000,000, and it has depreciated by 50%. So the current value of the building is $500,000. The risk is the amount that has been unwittingly assumed, which is the remaining 50% of the replacement value, or $500,000.
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Alida
11 months ago
Hmm, I'm a bit confused. If the building has depreciated by 50%, does that mean the risk is the full $1,000,000 replacement value, or just the remaining 50%? I'll need to think this through carefully.
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Kayleigh
11 months ago
This seems straightforward - the building has depreciated by 50%, so the risk assumed must be the remaining 50% of the replacement value, which is $500,000.
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Troy
1 year ago
Hmm, I wonder if the building's owner has any insurance to cover the depreciated value. That would be a smart move.
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Pearlie
1 year ago
I've got it! The amount of risk is the depreciated value, which is $500,000. A is the correct answer. Easy peasy.
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Glennis
1 year ago
Yes, A is the right answer. $500,000.
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Susy
1 year ago
I agree, the depreciated value is the amount of risk. A is correct.
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Cletus
1 year ago
I think it's $500,000, so A.
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Lashon
1 year ago
This is a tricky one. I'm not sure if the question is asking about the risk or the depreciated value. Let me think this through a bit more.
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Julianna
1 year ago
C) $600,000
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Cheryl
1 year ago
B) $550,000
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Golda
1 year ago
A) $500,000
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Earlean
1 year ago
Wait, isn't the replacement value $1,000,000? Wouldn't the risk be the difference between the depreciated value and the replacement value? I'll pick C.
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Carmela
1 year ago
Great, option C it is then.
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Leonie
1 year ago
That makes sense, I'll go with option C as well.
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Jean
1 year ago
I agree, so the risk would be $600,000.
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Lelia
1 year ago
I think the risk would be the difference between the replacement value and the depreciated value.
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France
1 year ago
Hmm, if the building has depreciated by 50%, then the remaining value is $500,000. I'll go with A.
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Myrtie
1 year ago
I believe the correct answer is B) $550,000 because the building has depreciated by 50%.
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Margret
1 year ago
I agree with Roosevelt, the depreciated amount is $500,000.
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Roosevelt
1 year ago
I think the answer is A) $500,000.
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