Title 6. Special TYPE case study ✅

Developer’s cost (Profit) = 15% Submission charge = 1% 1. Calculate the functional obsolescence at 15%on the replacement rate? Solution: Prevailing building rate = Rs. 20,000/sq.m. Less developers cost + = 0.16 x 20,000 submission charge (15 + 1 = 16%) = (-) 3,200 Net building rate 20,000 - 3,200 = Rs. 16,800/- Total built up area of building = 400 sq.m. Building value - 400 x 16,800 = Rs. 67,20,000 Functional obsolescence = 15% on replacement rate Functional obsolescence value = 0.15 x 67,20,000 = Rs. 10,08,000/- 2. What is the physical obsolescence with 10% salvage value? Built up area = 400 m 2 Replacement rate = Rs. 20,000/m2 Replacement value 400 x 200 = Rs. 80,00,000 Age (flooring) = 40 years Life = 80 years Depreciation cost =40�� 0.90 �� 80,00,000 80 = Rs. 36,00,000/- ∴Physical obsolescence = Rs. 36,00,000/- NOTE: The age of Flooring is 40 years means; it is presumed that the building is 40 years old 3. What is the total depreciated value of the building? Present replacement value = Rs. 80,00,000/- Physical Depreciation cost = Rs. 36,00,000/- Technical Depreciation cost (Due to Functional obsolescence) = Rs. 10,08,000/- Total Depreciation Cost = Rs. 46,08,000/- Net Depreciated value of the bldg = Rs. 33,92,000/- 4. What is the total value of the property? Land extent = 400sq.m. Market value of land = Rs. 15,000/- Sq. m Value of land - 400x15,000 = Rs. 60,00,000 /- Add depreciated value of building= Rs. 33,92,000/-
Total value of the property = Rs.93,92,000/- Say Rs.93,92,000/- 5. What is the physical depreciation with 10% salvage, after allowing 15% for functional obsolescence Net building rate is 20,000-3000 = Rs. 17,000/- Hence total replacement value is 400 x 17,000 = Rs. 68,00,000/- Physical Depreciation after allowing functional obsolescence’s i.e 68,00,000 x 40x0.90 = Rs. 30,60,000/- 80 MCQ’s: i.Whatisthefunctionalobsolescenceat15%onthereplacementrate? a. 10,08,000/- b. 33,92,000/- c. 36,00,000/- d. 46,08,000/- ii. What is the physical obsolescence with 10% salvage value? a.10,08,000/- b.33,92,000/- c. 36,00,000/- d. 46,08,000/- iii. What is the net depreciated value of the building? a.40,00,000/- b. 33,92,000/- c. 36,00,000/- d. 46,08,000/- iv. What is the total value of the property? a.60,00,000/- b.80,00,000/- c.33,92,000/- d. 93,92,000/- v. What is the physical depreciation with 10% salvage, after allowing 15% for functional obsolescence a.10,08,000/- b. 30,60,000/- c. 36,00,000/- d. 46,08,000/- Case study 4: (On Cost Approach) A building of 30 year with three storyed total built up area of 2500 Sqmtr and sits on land of 4000 Sqmtr. The building is of 20” load bearing wall in GF and 15” wall in upper floor, ornate doom in the centre and all floor height 14’ has determined that it would cost Rs. 4.0 Crore located on the main road. In order to build such structure now land locality is selling @ Rs. 2000/- per Sqmtr has been severnt recent sale in the area. Balance expected life is 30 yr. The department take up an exercise to value its assets and inventory and requires a value estimated? MCQ’s & Solution: i. Which approach and method of valuation would be best used to value the property? a. Market approach–Hedonic b. Market approach –Sales comparison c. Cost approach– Reproduction d. Cost approach – Replacement cost ii. Which approach used to assess the value of land and what is the estimated value of land? a. Market approach – Sales comparison – Rs. 80 lakh b. Market approach – Indirect comparison – Rs. 80 lakh c. Income approach – Rental method – Rs. 80 lakh