Certified Floodplain Manager (CFM) Practice Exam

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Study for the Certified Floodplain Manager (CFM) Exam with a comprehensive quiz featuring multiple-choice questions, exam tips, and in-depth explanations. Prepare yourself for the CFM certification with confidence!

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How is Actual Cash Value (ACV) determined according to FEMA?

Initial cost minus the depreciation percentage based on condition.
Replacement cost minus a percentage based on age and condition.
Cost based on the level of flood risk.
Price based on the cost of floodproofing measures.

The correct answer is: Replacement cost minus a percentage based on age and condition.

ACV is determined by taking the replacement cost of a damaged property and subtracting a percentage based on its age and condition. This means that option B is the most accurate and comprehensive way that FEMA determines the Actual Cash Value of a property. Options A, C, and D do not fully consider the cost of replacement and may not accurately reflect the current value of the property. Option A only takes into account the initial cost and depreciation, while option C solely focuses on the level of flood risk. Option D only considers the cost of floodproofing measures, which may not accurately reflect the cost of replacing the property. Therefore, option B is considered the most accurate and thorough way to determine ACV by FEMA.