Title 4. CASE STUDY LB ✅

Add Repairs cost a. First time repair cost Rs. 1,00,000/- b. Second time repair cost Rs. 2,50,000/- Total investment cost Rs. 24,80,000/- (I) II) Total purchase cost for Mr. “B” a. Re sale price Rs 43,00,000/- (II) b. Brokerage charges @ 1% Rs. 43,000/- c. Stamp duty charges @ 5% Rs. 2,15,000/- Therefore total purchase price for “B” is Rs. 45,58,000/- (III) Hence gain amount for Mr “A” from this sale is (II-I) Rs. 18,20,000/- MCQ’s i) What is the acquisition cost for Mr. “A” a. 20,00,000/- b. 21,30,000/- c. 24,80,000/- d. 20,78,000/- ii) What is the gain amount for Mr. “A” from this re sale? a. 20,00,000/- b. 27,00,000/- c. 24,80,000/- d. 18,20,000/- iii) What is the amount spent by Mr. “A” for cost to cure? a. 4,80,000/- b. 2,13,000/- c. 3,50,000/- d. 2,50,000/- iv) What type of obsolescence is rectified in this case? a. Functional obsolescence b. Economic obsolescence c. Technological obsolescence d. None of the above v) In this case, the “cost to cure” obsolescence is viable? a. Yes b. No c. May be d. May not be vi) What is the original cost for Mr. “B” in this case? a. 20,00,000/- b. 21,30,000/- c. 43,00,000/- d. 45,58,000/- Case Study 3: (On Cost approach) A Land area is 400 sq.m. with two storied building with total built up area of 400 sq.m. The roofing is changed to R.C.C 20 years back and the age of the flooring is 40 years. The total life of the building is 80 years and the building is well maintained. The present market value of land is Rs 15,000 per sq.m. and the prevailing building rate of construction near the town is 20,000 per sq.m. The developer’s profit is 15% of the cost and 1% towards submission charges and on 15% for functional obsolescence. Data : Area of the land = 400 sq.m. Builtup area of GF & FF = 400 sq.m. Age of the flooring (building) = 40 years Total life of the

= 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 = 400 sq.m. Market value of land = Rs. 15,000/- Sq. m Value of land - 400 x 15,000 = 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 with 1% cost. Net building rate is 20,000-3200 = Rs. 16,800/- Hence total replacement value is 400 x 16,800 = Rs. 67,20,000/- Physical Depreciation after allowing functional obsolescebce is i.e 67,20,000 x 40 80x 0.90 = Rs. 30,24,000/- MCQ’s: i. What is the functional obsolescence at 15% on the replacement rate? 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 with 1% cost. a. 10,08,000/- b. 30,24,000/- c. 36,00,000/- d. 46,08,000/- Case Study 4: (Cost approach) An Ancient Architectural Palatial bungalow of 80 year old is located on a commercial street in a metro city is converted into Govt. Museum after making full renovation & retrofitting of the palace by investing the cost of Rs. 120 lakh. The palace is restrengthened & fully