Which of the following is true about a competitive market analysis?

While a competitive market analysis may indirectly aid in determining property value for insurance purposes, its primary function is to assess market conditions rather than to establish coverage amounts. Insurance evaluations typically require specific assessments of risk and replacement costs, which a CMA does not directly provide.

Depreciable value is determined based on the cost basis of an asset for tax purposes, and while a CMA assesses market value, it does not specifically address depreciation calculations. Depreciation considers factors such as wear and tear and economic life, which are outside the scope of a standard competitive market analysis.

Local tax assessments may influence property values, but a competitive market analysis relies more heavily on recent sales data and comparable properties rather than governmental tax valuations. Tax assessments can lag behind current market trends, making them less reliable for accurate market analysis.