Which type of depreciation only contains incurable elements?

The correct choice highlights economic or external obsolescence, which specifically refers to a decline in property value due to external factors beyond the property owner's control. These factors can include changes in the neighborhood, economic downturns, or shifts in market demand. Unlike other types of depreciation, which may involve elements that can be remedied or managed (like physical wear and tear or functional issues within the property), economic obsolescence arises from outside influences that are often incurable.

For instance, if a factory is located near a new highway that redirects traffic away from it, leading to reduced business, that diminished value is attributable to externalities rather than anything that can be physically fixed or improved upon within the property itself.

In contrast, physical deterioration relates to the wear and tear of a property's physical components, which can often be repaired or replaced. Functional obsolescence pertains to reductions in property value due to outdated features or designs that may still be improved upon with renovations. Physical depreciation may imply a general decline in the condition of the property but does not have the specific contextual aspect of being caused by incurable external factors that economic obsolescence embodies.