Part B Problem Solving Subject Property The subject property has a modern and efficient commodity storage
Question:
Part B – Problem Solving
Subject Property
The subject property has a modern and efficient commodity storage facility that has had recent renovations (14 years actual age; 10 years estimated effective age). Based on current market data, the current land value is $560,000. Replacement Cost New of the facility improvement is $2,620,000.
Market Data
Following is information about two local properties with similar commodity storage facility improvements that have sold recently. The properties had no other improvements.
Sale 1 sold recently for $1,830,000. Land value at the time of sale was $700,000. RCN
(Replacement Cost New) of the commodity storage facility improvements at the time of sale was $2,580,000. Actual age of the facility improvements at the time of sale was 12 years; the facility had some deferred maintenance and the estimated effective age was
14 years.
Sale 2 sold recently for $1,720,000. Land value at the time of sale was $440,000. RCN (Replacement Cost New) of the commodity storage facility improvements at the time of sale was $2,130,000. Actual age and effective age of the facility improvements at the time of sale was 10 years.
B-1. (4 Points each) What is the contributory value of the storage facility improvements for each sale property?
B-1.1 Sale 1: $-------
B-1.2: Sale 2: $-------
B-2. (4 Points each) What is the total accrued depreciation ($) for the storage facility improvements on each sale property?
B-2.1 Sale 1: $----
B-2.2 Sale 2: $------
B-3. (4 Points each) What is the annual depreciation ($/yr.) for the storage facility improvements on each sale property? (Round to the nearest whole dollar)
B-3.1 Sale 1: $-----
B-3.2 Sale 2: $------
B-4. (4 Points each) What is the annual depreciation rate (%/year) for the storage facility improvements on each sale property? (Round to 1 decimal place; i.e., for your answer 1.23% =1.2% and 0.0123 = 1.2%)
B-4.1 Sale 1:------%
B-4.2 Sale 2:------%
B-5. (4 Points) Based on the annual depreciation rates indicated in the previous problem, what is the appropriate annual depreciation rate (%) for the subject property storage facility improvements? (Round to 1 decimal place)
---------------%
B-6. (4 Points) Based on the depreciation rate conclusion from the previous problem, what is the indicated total economic life (years) for these improvements? (Round to the nearest whole year)
-------------Years
B-7. (4 Points) What is the annual depreciation ($/yr.) for the subject property storage facility improvements? (Round to the nearest whole dollar)
$--------------
B-8. (4 Points) What is the total accrued depreciation ($) for the subject property improvements? (Round to the nearest whole dollar)
$--------------
B-9. (4 Points) What is the depreciated value (same as contributory value) for the subject property improvements? (Round to the nearest whole dollar)
$----------------------
B-10. (4 Points) What is the indicated value of the subject property by the Cost Approach? (Round to the nearest $10,000)
$ ------------------
Process Dynamics And Control
ISBN: 978-0471000778
2nd Edition
Authors: Dale E. Seborg, Thomas F. Edgar, Duncan A. Mellich