Certified Pennsylvania Evaluator Practice Exam

What considerations fall under the term "value in use"?

1. The financial stability of the market

2. The intrinsic worth based on utility to the owner

3. The costs associated with property maintenance

4. The potential rental income of the property

The correct answer is: The intrinsic worth based on utility to the owner

The concept of "value in use" refers specifically to the worth of an asset based on its utility to the owner. This perspective emphasizes how valuable an asset is to its current user, considering both how it serves their specific needs and the actual economic benefits it provides in its current context. This intrinsic value is often assessed through a subjective approach, recognizing that different owners may attribute different levels of value to the same asset based on their unique circumstances, preferences, and requirements. For instance, a property may have particular significance to an owner due to its location or suitability for their business, which could enhance its intrinsic value beyond what the broader market may dictate. In contrast, the other considerations listed relate more to external factors or market influences rather than the personal utility derived by the current owner from the asset. Understanding "value in use" is crucial in property evaluation, as it allows for a more nuanced view of worth that enhances decision-making processes for owners and evaluators alike.