What factors are considered in determining equipment's fair market value?

• A. The owner's personal hobbies.
• B. The date of purchase and original price only.
• C. Equipment condition, market demand, and technological obsolescence.
• D. The color of equipment.

Answer: (C)

Fair market value is determined by what a willing buyer would pay a willing seller in an open market today, not by past costs or cosmetic details. The most important factors are the equipment’s condition (wear, age, maintenance history, reliability), current market demand for that type of equipment (how many are available, buyers’ interest, prevailing resale prices), and technological obsolescence (whether newer models with better features have lowered the value of older units). These elements together capture the true current value. Historical data like the purchase date or original price doesn’t reflect depreciation and market shifts, and attributes such as the color of the equipment don’t affect value.