Using the Cost Approach to property appraisal, determine the final appraised value of a building and the land the bulding is on based upon the following:- Land Value-$6 million;> Building Cost (psf) - $250;> Total area (psf)-$100,000:> Developer's profit - S800,000;> Economic obsolescence - S1.5 million;> Functional obsolescence - $3 million;> Locational obsolescence - $2 million;> Curable depreciation - Si million;> Effective age -20 years:> Economic Age- 50 years.Oa $10.340,000Ob.S14,380,000OC S13,980.000Od. 510,380,000Oe. $8,380,000

Land value: $6 millionBuilding cost: $250 per square foot (psf)Total area: 100,000 square feet…

Answered: Using the Cost Approach to property…

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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The cost of the land, building and machinery would be reported at: a. Land= P 530,000; Building= P4,600,000; Machinery= P 2,370,000b. Land= P 500,000; Building= P4,400,000; Machinery= P 2,300,000c. Land= P 625,000; Building= P5,600,000; Machinery= P 2,675,000d. Land= P 655,000; Building= P5,400,000; Machinery= P 2,745,000
The Zylo Corp. made a basket purchase of Land, Building, and Equipment for $6250000. The appraised value of each asset was listed as follows. Land at $1500000, Building at $3900000, and equipment at $1200000. Required: Calculate the cost assigned to each asset.
Select the item that corresponds the statement. Replacement cost Real estate Depreciation External obsolescence Sales comparison approach Lease fee estate Going concern Comparable data Intrinsic value Net operating income Obsolescence Book value depreciation amount cost approach 1. Involves judgment as to the similarity of the subject property with respect to many value factors such as location, size, contract rent levels, quality of construction, reputation and prestige, age, and condition. 2. The amount considered on the basis of an evaluation of available facts, to be the ―true‖ or ―real‖ worth of an item. 3. Changes in competition or in surrounding land uses like an industrial plant near a residential area; This results to loss in value of a real estate. 4. Cost estimate that envisions constructing a structure of comparable utility, employing the design and materials that are currently used in the market 5. The Valuer‘s estimate is based on the reproduction or replacement cost of…
Indicate whether each of the following expenditures should be classified as land, land improvements, buildings, equipment, or none of these. 1. 2. Parking lots Electricity used by a machine 3. Excavation costs 4. Interest on building construction loan 5. Cost of trial runs for machinery 6. Drainage costs 7. Cost to install a machine 8. Fences 9. Unpaid (past) property taxes assumed 10. Cost of tearing down a building when land and a building on it are purchased
None
The following schedule reflects the incremental costs and revenues for acapital project. The company uses straight-line depreciation. The interestexpense reflects an allocation of interest on the amount of this investment,based on the company’s weighted average cost capital:Revenues $650,000Direct costs $270,000Variable overhead 50,000Fixed overhead 20,000Depreciation 70,000General & administrative 40,000Interest expense 8,000458,000Net profit before taxes $192,000══════The annual cash flow from this investment, before tax considerations, would be:
Diego Company paid $186,000 cash to acquire a group of items consisting of land appraised at $53,000 and a building appraised at $159,000. Allocate total cost to these two assets and prepare an entry to record the purchase. Complete this question by entering your answers General Total Cost Journal Allocate total cost to these two assets. Percent of Total Apportioned Cost Land Building Totals
Several expenditures are listed below. Indicate whether or not each expenditure would be included in the cost of acquisition for each item below. The answer box provides two options, Yes (if the expenditure would be included ) or No, (if the expenditure would not be included.) Cost testing materials and labor in testing a purchased machine Yes before use Compensation for injury to No construction worker Cost of overhaul to a used Yes machine purchased before initial use Cost of tearing down a building Yes on newly acquired land Repairs to a new machine Yes damaged while moving it into > > > > >
Please Solve In 20mins
The cost of supplies (materials) used to test new equipment would be debited to which of the following accounts? a. Buildings Ob. Land c. Land Improvements Od. Machinery and Equipment
For project A, what was the calculations for depreciation to get to the final answer of 720 000?
The land was cleared for RO 7,100. The cost of land would be recorded at:

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