The City of Waltham wants to obtain the value of its 99 year old City Hall property. Your firm has been engaged toprovide an estimate of value. You will use the Cost Approach to determine value. You will be required to estimatereproduction or replacement cost new (specify which is appropriate and why) and proceed through the steps ofthe Cost Approach to complete the task.Cost Estimates (000 omitted): Cost of new construction: $153,000; Since the last renovation 30 years ago, physicaldeterioration: $22,000; functional obsolescence: $6,000; external obsolescence: $2,000; four (4) comparable landvalues have been identified for the valuation estimate: $49,000; $35,000; $40,000; $52,000.Show your answer and the steps of your analysis below:

The Cost ApproachThe cost approach is a method used in real estate appraisal to estimate the value…

Answered: The City of Waltham wants to obtain the…

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Prepare the entry, if necessary, to adjust the account balances because of the revision of the estimated life in 2019. (If no entry is required, select "No Entry" for the account titles and enter 0 for the amounts. Credit account titles are automatically indented when amount is entered. Do not indent manually.) Account Titles and Explanation Debit Credit
Compute the annual depreciation that would have been charged from 2004 through 2021. Annual depreciation from 2004 through 2021 $ / yr.
Parker & Stone, Inc., is looking at setting up a new manufacturing plant in South Park to produce garden tools. The company bought some land 5 years ago for $7,385,474 in anticipation of using it as a warehouse and distribution site, but the company has since decided to rent these facilities from a competitor instead. If the land were sold today, the company would net $3,944,875. An engineer was hired to study the land at a cost of $617,920, and her conclusion was that the land can support the new manufacturing facility. The company wants to build its new manufacturing plant on this land; the plant will cost $5,838,309 to build, and the site requires $994,648 worth of grading before it is suitable for construction. What is the proper cash flow amount to use as the initial investment in fixed assets when evaluating this project?
In 1998, Novak Company completed the construction of a building at a cost of $2,500,000 and first occupied it in January 1999. It was estimated that the building will have a useful life of 40 years and a salvage value of $76,000 at the end of that time. Early in 2009, an addition to the building was constructed at a cost of $625,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $25,000. In 2027, it is determined that the probable life of the building and addition will extend to the end of 2058, or 20 years beyond the original estimate. (a) Using the straight-line method, compute the annual depreciation that would have been charged from 1999 through 2008. Annual depreciation from 1999 through 2008 $ GA /yr.
Note:- Do not provide handwritten solution. Maintain accuracy and quality in your answer. Take care of plagiarism. Answer completely. You will get up vote for sure.
Required information [The following information applies to the questions displayed below] University Car Wash built a deluxe car wash across the street from campus. The new machines cost $231,000 including installation. The company estimates that the equipment will have a residual value of $25,500. University Car Wash also estimates it will use the machine for six years or about 12,500 total hours. Actual use per year was as follows: Year 1 2 3 4 5 6 Total Year 1 2. Prepare a depreciation schedule for six years using the double-declining balance reinod (Do not round your intermediate calculations.) Hours Used 2,900 1,800 1,900 2,100 $ 1,900 1,909 UNIVERSITY CAR WASH Depreciation Schedule-Double-Declining Balance Depreciation Expense End of year amounts Accumulated Depreciation Book Value
An investor is considering the purchase of an existing suburban office building approximately five years old. The building, when constructed, was estimated to have an economic life of 50 years, and the building-to-value ratio was 80 percent. Based on current cost estimates, the structurewould cost $5 million to reproduce today. The building is expected to continue to wear out evenly over the 50-year period of its economic life. Estimates of other economic costs associated with the improvement are as follows:Repairable physical depreciation $300,000 to repairFunctional obsolescence (repairable) $200,000 to repairFunctional obsolescence (nonrepairable) $ 25,000 per year rent lossThe land value has been established at $1 million by comparable sales in the area. The investor believes that an appropriate opportunity cost for any deferred outlays or costs should be 12 percent per year. What would be the estimated value for this property?
In 1993, Concord Company completed the construction of a building at a cost of $ 2,100,000 and first occupied it in January 1994. It was estimated that the building will have a useful life of 40 years and a salvage value of $ 63,200 at the end of that time. Early in 2004, an addition to the building was constructed at a cost of $ 525,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $ 21,000. In 2022, it is determined that the probable life of the building and addition will extend to the end of 2053, or 20 years beyond the original estimate.
28. Capital versus Revenue Expenditure Waleed Company, a privately owned business, supplies water to several communities. Waleed has just performed an extensive overhaul on one of its water pumps. The overhaul is estimated to extend the life of the pump by 10 years. The residual value of the pump is unchanged. You have been asked to determine which of the following costs should be capitalized as a part of this overhaul. Those costs not capitalized should be expensed. Required: CONCEPTUAL CONNECTION: Classify each cost as part of the overhaul or as an expense 1.New pump motor 2. Repacking of bearings (performed monthly) 3. New impeller (rotating component of a pump) 4. Painting of pump housing (performed annually) 5.Replacement of pump foundation 6.New wiring (needed every five years) 7. Installation labour, motor 8. Installation labour, impeller 9. Installation labour, wiring 10. Paint labour (performed annually) 11. Placement of fence around pump*(*A legal requirement that…
The City of Houghton bought new municipal sewage equipment in the year 2010. The equipment cost 122,325 dollars and the city spent an additional 19,080 dollars for installation. The sewage equipment was put into service on June 1st, 2010 and the city removed the equipment from service on September 12, 2022. Using the US Straight Line Depreciation Schedule, estimate the total value of depreciation recorded in the accounting books for the years 2010 through 2022 (i.e. calculate the sum of depreciation in each year for years 2010 through 2022). (note: round your answer to the nearest cent and do not include spaces, currency signs, or commas; do not round the recovery factors from the depreciation tables)
In 1990, Sunland Company completed the construction of a building at a cost of $880,000 and first occupied it in January 1991. It was estimated that the building would have a useful life of 40 years and a salvage value of $26,000 at the end of that time. Early in 2001, an addition to the building was constructed at a cost of $220,000. At that time, it was estimated that the remaining life of the building would be, as originally estimated, an additional 30 years, and that the addition would have a life of 30 years and a salvage value of $9,000. In 2019, it is determined that the probable life of the building and addition will extend to the end of 2050, or 20 years beyond the original estimate. Compute the annual depreciation that would have been charged from 2001 through 2018. Annual depreciation from 2001 through 2018 Compute the annual depreciation to be charged, beginning with 2019. Annual depreciation expense—building
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