What is the role of installation in determining Fair Market Value-in-Place?

The role of installation in determining Fair Market Value-in-Place is significant because installation is considered an integral part of an asset's overall value. When valuing an asset, its installation reflects the costs and efforts that contribute to its operational capability. This includes not only the physical setup of the equipment but also the labor, materials, and expertise involved in getting the asset ready for use in its intended environment.

Fair Market Value-in-Place takes into account the total economic value of an asset as it is currently situated and prepared for operation. Since installation directly influences functionality and efficiency, it adds to the overall contribution of the asset rather than merely being an ancillary cost. In other words, without the installation, the asset wouldn't serve its purpose effectively or at all, which underlines the importance of considering it in the valuation process.

Other options do not accurately reflect the essence of installation's role in valuation. The idea that it's not considered or merely accounts for equipment condition overlooks its vital contribution, while suggesting it decreases value due to costs fails to recognize the value added by proper installation.