How is the hybrid cost model for real estate represented mathematically?

The hybrid cost model for real estate is represented mathematically as follows: Market Value (MV) is calculated as the gross quantity (GQ) multiplied by the sum of the product of the physical loss (PL) and land size (LSIZE), added to the sum of the physical improvements (Pi) and improvement size (Isize). Finally, an additional factor, operating allowance (OA), is included outside of the brackets to account for operational costs or allowances that may be necessary for maintaining the property.

This representation captures the two fundamental aspects of property values in the hybrid model: the cost associated with physical characteristics and improvements and the operational allowances. By using the gross quantity as a multiplier, the model reflects how market conditions and physical attributes combine to influence overall market value.

The other options do not accurately reflect the components involved in the hybrid cost model, either by misplacing the variables within the mathematical structure or failing to incorporate key elements essential to the model’s comprehensive calculation. Thus, the answer that aligns with the true representation of the hybrid cost model is indeed correct.