Tiêu đề 3. Case study ✅

Case Study Small case study: (4 mcq’s each 2 marks = 8 marks) Case Study 1: (On Cost Approach) A person constructs a warehouse of 3 mtr height of 500 Sqmtr built area in 1975. Calculate the replacement cost of building in 1995, if the rate of construction in 1975 is @ Rs 350/m2 and @ Rs. 3570/m2 in 1995. Total life of the building is 40 yr. Assume 10% Salvage Solution: i. Acquisition cost of building built in 1975 i.e 500 x 350 = Rs.1,75,000/- ii. Present replacement cost of the bldg. in 1995 i.e 500 x 3570 = Rs. 17,85,000/-(ii) iii. Depreciation cost of the building is Rs. 17,85,000 x 20/40 x 0.90 = Rs. 8,03,250/- (iii) Hence Net replacement cost of the ware house is (ii-iii) = Rs.9,81,750/- MCQ’s i) What is the present replacement cost of warehouse in1995? a. 17,85,000/- b. 18,85,000/- c. 19,85,000/- d. 20,85,000/- ii) Which method of depreciation is used in this case a. WDV method b. Straight line method c. Linear method d. Sinking fund method iii) What is the net replacement value of Warehouse a.8,81,750/- b. 9,81,700/- c. 10,81,750/- d. 17,85,000/- iv) What is the depreciation cost of the bldg. in the above case a.8,81,750/- b.9,81,700/- c.8,03,250/- d. 17,85,000/- v) What is the historic cost of the building a. 1,75,000/- b. 9,81,750/- c. 8,03,250/- d. 17,85,000/- Case study 2: (Cost approach) Mr. “A” has purchased an old house for Rs. 20,00,000/-. The brokerage paid is 1.50% & Stamp duty charges is 5%. After purchase he has done repair work immediately once for Rs 1 lakh and second time for Rs. 2.50 lakh. He wants to sell property for Rs. 50,00,000/-. And he sold that house to Mr. “B” after one year of purchase for sale price for Rs. 43,00,000/- by negotiation. Mr. “B” has paid 1% brokerage charges and stamp duty charges @ 5%. Solution: I) Total acquisition cost for purchase of house for Mr. “A” a. Purchase price for Mr. “A” is Rs.20,00,000/- b. Brokerage charges @ 1.5% Rs.30,000/- c. Stamp duty charges @ 5% Rs. 1,00,000/- Total Acquisition cost is Rs.21,30,000/- 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/- So, Capital gain tax 20%, if applicable is Rs. 3,64,000/- 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 resale? 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. Maybe 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/- vii) The capital gain tax of 20% if applicable is ___ a. 3,64,000/- b. 3,50,000/- c. 4,34,000/- d. 4,60,000/- 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. Built-up area of GF & FF = 400 sq.m. Age of the flooring (building) = 40 years Total life of the building = 80 years Present market rate of land = Rs. 15,000/sq.m. Prevailing building construction rate
= Rs. 20,000/sq.m. 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