What is the formula used to determine dollar depreciation?

To determine dollar depreciation, the formula used is the difference between Replacement Cost New (RCN) and Replacement Cost New Less Depreciation (RCNLD). This reflects how much value the asset has lost over time due to wear and tear, obsolescence, or market conditions.

By subtracting RCNLD from RCN, you arrive at the dollar amount that represents the depreciation of the asset. This approach allows appraisers to quantify the loss in value as a direct result of depreciation, making it an essential calculation in the appraisal process.

The other methods suggested in the choices do not effectively calculate depreciation. For example, addition or division of these components would not yield a meaningful representation of dollar depreciation in the context of asset valuation. Therefore, using subtraction, as in the correct answer, provides a clear and accurate measure of depreciation.