Estimating Practice Exam

Disable ads (and more) with a membership for a one time $2.99 payment

Prepare for the Estimating Exam with our comprehensive quiz. Enhance your skills with targeted questions and detailed explanations. Excel in your exam!

Each practice test/flash card set has 50 randomly selected questions from a bank of over 500. You'll get a new set of questions each time!

Practice this question and more.

What term describes the increase in value of an asset over time?

Devaluation
Appreciation
Capital Growth
Cost Recovery

The correct answer is: Appreciation

Appreciation is the term that refers to the increase in value of an asset over time. This concept is critical in finance and investing, as it signifies how the worth of an asset, whether it be real estate, stocks, or any other investment, can increase due to various factors, including inflation, demand, market conditions, or improvements made to the asset itself. When an asset appreciates, it signifies growth in its market value, leading to potential profits for investors when they choose to sell or leverage the asset. Understanding appreciation helps investors make informed decisions and foster strategic planning for their portfolios over time. The other terms do not align with the concept of increasing value. Devaluation typically refers to a decrease in the value of an asset, commonly associated with currency. Capital growth often encompasses appreciation but is specifically used in the context of overall growth in the value of investments or properties rather than the increase in the value of individual assets over time. Cost recovery is related to the recovery of capital investments rather than the appreciation of an asset's value.