You have been hired by Agirich Appraisal. Your next assignment is to provide the indicated value for a subject property using the cost approach. Be sure to adjust for land classification, financing terms, date of sale, and location. Your associates have already collected unimproved comparable sales that will help you with your analysis (see table 5.1). The subject property has 500 acres in a good location and will be a cash sell. It has 300 acres of cropland and 200 acres of pasture land. There is also an improvement with a reproduction cost of $400,000. The improvement has an effective age of 15 years. There is also a similar property with improvements. The land is valued at $300,000. The reproduction cost of the improvement is $450,000 and has an effective age of 10 years. This property sold for $500,000.

Show all of your calculations and supporting tables. Your new "boss" must be able to review your work and determine if your work has been done correctly. If your analysis is hard to follow, you will be fired (poor grade).

Table 5.1 Comparable Sale Summary Sale Date Sales Price Acres Terms Location No. 1 6 mo. 6 mo. 6 mo. Current 1 year $225,000 525,000 373,275 335,625 725,900 450 500 525 375 700 Avg. Avg. Avg. Avg. 4 Cash Cash Cash Cash Cash Cash Cash Seller/Finance $/ Acre Crop Pasture Acres Acres $5000 450 1,050 500 0 711 2 00 325 895 3 00 75 1,037 600 100 772 300 867 200 100 1200 346 100 Avg. Current 390 532,680 260,000 535200 690 300 Good Good 6 mo. 8 1 year 446 Good Table 5.1 Comparable Sale Summary Sale Date Sales Price Acres Terms Location No. 1 6 mo. 6 mo. 6 mo. Current 1 year $225,000 525,000 373,275 335,625 725,900 450 500 525 375 700 Avg. Avg. Avg. Avg. 4 Cash Cash Cash Cash Cash Cash Cash Seller/Finance $/ Acre Crop Pasture Acres Acres $5000 450 1,050 500 0 711 2 00 325 895 3 00 75 1,037 600 100 772 300 867 200 100 1200 346 100 Avg. Current 390 532,680 260,000 535200 690 300 Good Good 6 mo. 8 1 year 446 Good