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As an intern of Zoom Valuation Firm, you have been instructed to estimate the value of a factory building put up 25 years ago
As an intern of Zoom Valuation Firm, you have been instructed to estimate the value of a factory building put up 25 years ago on a 4-acre parcel. The factory has a total gross building area of 3.000 square metres. Identify and state the method of valuation you will use and estimate the market value of the factory building based on the following information provided: a) Current average construction cost for similar buildings is estimated at GHe4,000 per square metre. b) GH120,000 will be required to fix physically deteriorated parts of the building. c) Functional obsolescence is estimated at 7% of total building cost and external obsolescence estimated at GH600,000. d) Land value in the neighborhood is currently estimated at GHe600,000 per acre. (20 marks) Note: Show all necessary calculations and also construct a table of estimation using the following information: Replacement Cost; Less Depreciation; Physical Deterioration; Functional Deterioration; External Obsolescence; Total Accrued Depreciation; Depreciated Replacement Cost; Add Land Value: and Market Value.
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