Assume you have been hired to appraise a local hospital. Your best estimate of the reproduction $($or replacement$)$ cost of the building is $$3,700,000.$ However, upon evaluating the use of land in the local area, you have deemed the value of the site to be worth an additional $$800,000.$ If the building has physically depreciated by $$500,000$ over its lifetime and there is an additional loss of $$20,000$ due to functional obsolescence, what is the indicated value of the hospital using the cost approach?

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