Important Question And Answer: Civil - Estimation and Quantity Surveying - Valuation

VALUATION

1. Define valuation

Valuation is the process of estimating the cost of a property based on its present condition. The properties may be immovable properties like land, buildings, mines trees quarries etc., and movable properties such as coal, oil, steel, cement, sand etc.

2. What are the important factors influencing the value of building?

1. Type of the building

2. Location of the building

3. Expected life of the building

4. Size and shape of the building

5. The Present condition of the building

6. Legal control of the building

3. What is the purpose of valuations?

1. For assessment of wealth tax, property tax etc

2. For fixation of rent

3. For security of loans or mortgage

4. For insurance, betterment charges etc

5. For compulsory acquisition

6. For reinstatement.

4. Define Floor rate.

It is the ratio between the total built up area (Plinth area) of all floors and the area of the plot.

Floor Area Ratio = Total Plinth area of all floors / Plot area

5. Define Plinth area rate.

It is the ratio between the total present cost of a particular type of building and its plinth area.

Plinth area rate = Total present cost of a building/ plinth area.

6.  A property fetches a net income of Rs.900.00 deducting all outgoings. Workout the capitalized value of the property if the rate of interest is 6% per annum.

Year's purchase = 100/6  = 16.67

Capitalized value of the property = net income x Y.P

= 900 x 16.67

= Rs.15003.00

7. Find the plinth area required for the residential accommodation for an assistant Engineer in the pay scale of Rs.400.00 to 1,000 per month.

Average pay = 400+1000 /2 = Rs.700/month

Average month rent @10% of salary = 700.00/10 = Rs.70.00 Average annual rent 70.00 x 12 = Rs. 840.00

Capital cost of the building @ 6% interest = 840 x 100 / 6 = Rs.14000.00 Plinth area required @ Rs.150.00 per sq.m of plinth area

= 14000/150 = 93.33sq.m Normally the quarters for the assistant engineer should be constructed at the

cost of Rs.14000.00 having plinth area of 93.33 sq.m.

But due to the increase in the cost of construction, this may be increased by 100% and the capital cost of construction may be fixed as Rs.28,000.00 and the approximate plinth areas of 93.33

8.     A pumping set with a motor has been installed in a building at a cost Rs.2500.00.Assuming the life of the pump as 15 years, workout the amount of annual installment of sinking fund to be deposited to accumulate the whole amount of 4% compound interest.

The annual sinking fund I = Si/(1+i)ⁿ - 1

= 2500 x 0.04 /(1+0.04)¹⁵ -1 = Rs.125

The owner is to deposit Rs.125/-annually in 4% compound interest carrying investment for 15 years to accumulate Rs.2500/-

9. An old building has been purchased by a person at a cost of Rs.30,000/- excluding the cost of the land.Calculate the amount of annual sinking fund at 4% interest assuming the future life of the building as 20 years and scarp value of the building as 10% of the cost of purchase.

The total amount of sinking fund to be accumulated at the end of 20 years S = 3000x (90/100) = Rs.27000.00

Annual installments of sinking fund I = Si/(1+i)ⁿ - 1

= 27000 x 0.04 /(1+0.04)²⁰ -1 = Rs.907.20 Annual installments for sinking fund requires for 20 years = Rs.907.20

10.            Write the necessity of valuation.

•         Rent fixation. It is generally taken as 6% of the valuation of the property

•         For buying and selling

•         Acquisition of property by Govt.

•         To be mortgaged with bank or any other society to raise loan

•         For various taxes to be given and fixed, by the Municipal Committee

•           Insurance: For taking out on insurance policies.

11.Define the Value :

Value-Present day cost of a engineering structures (saleable value)

12.Define the Cost:

Original cost of construction. It is used to find out the loss of value of property due to various reasons.

13.Define the Gross income:

Total amount of the in come received from the property during the year, without deducting outgoings

14.Define the Net come:

An amount left at the end of the year after deducting all useable outgoings

15.Define the Obsolescence:

The value of property decreases if its style and design are outdated i.e rooms not properly set, thick walls, poor ventilation etc. The reason of this is fast changing techniques of construction, design, ideas leading to more comfort etc.

16.Define the Scrap Value:

Scrap Value: If a building is to be dismantelled after the period its utility is over, some amount can be fetched from the sale of old materials. The amount is known as scrap value of a building. If various from 7% to 10% of the cost of construction according to the availability of the material.

17.Define the Salvage value

If a property after being discarded at the end of the utility period is sold without being into pieces, the amount thus realized by sale is known as its salvage value.

18.Define the Capitalized value:

It is defined as that amount of money whose annual interest at the highest prevailing rate will be equal to the net income received from the property. To calculate the capitalized value, it is necessary to know highest prevailing on such properties and income from the property.

19. Define sinking fund.

A fund which is gradually accumulated and set aside to reconstruct the property after the expiry of the period of utility is known as sinking fund. The sinking funds may be found out by taking a sinking fund policy with any insurance company or deposition

some amount in the bank. Generally while calculating the sinking fund, life of the building is considered. 90 % of the cost of construction is used for calculations 10 % is left out as scrap value.

sinking fund (I) = Si/ (1+i)ⁿ -1

Where I = Annual instalment required

n = Number of year required to creat sinking fund

i = Rate of interest expressed in decimal i.e 5% as 0.05 S = Sinking fund

20.Define Market value

Market value: The market value of a property is the amount, which can be obtained at any particular time from the open market if the property is put for sale. The market value will differ from time to time according to demand and supply.

21.Define Book value

Book value: Book value is the amount shown in the account book after allowing necessary depreciations. The book value of a property at a particularly year is the original cost minus the amount of depreciation up to the previous year.

22.Write the various methods of valuation.

1.Plinth area method 2.depreciation rate method 3.Rental method

4.Land and building method 5.Development method

23.The estimated value of a building is Rs.5,00,000.The carpet area of the building is 70 sq.m If the plinth area is 20% more than this ,what is the plinth rate of the building?

Value of building = Rs.5, 00,000

Carpet area = 70 m²

Plinth area = 20 % more  = 1.20 x 70 = 84 m2

Plinth area rate of the building = Value of the building/Plinth area

= 5,00,000/84 = Rs.5952.38m²

24.The present value of a property is 20000/- Calculate the standard rent. The rate of interest may be assumed as 6%.

Annual rent @ 6% = 20000x 6 /100 = Rs.1200/-

Standard rent per month = 1200/12 = Rs.1200/12 = Rs.100/-

25.Write the various methods of depreciation

1.Straigth line method 2.Constant percentage basis 3.Quantity survey method 4.Sinking fund method.

26.Define the Year's purchase

Year's purchase : It may be as the figure which when multiplied by the net income from a property gives capitalized value of the property.It can also be defined as 'a certain amount of capital whose annuity of Rs.1/- at a certain rate of interest can be received'

Year's purchase = 100/rate of interest = 1/i

27.Define the  Annuity

Annuity : The return of capital investment in the shape of annual installments monthly, quarterly, half yearly &yearly.

28.Define Analysis of work:

The process of determining the rate of an item of work or supply of the material is known as the analysis of rate or rate analysis.

29.What is the size of septic tank for 50 users?

4 cum

30.        What is the size of septic tank for 25 users?

2.5 cum

31.Define contract:

The contract is an under taking by a person or firm to do any work under certain terms and condition

32.Define Contractor:

A person or a firm who undertakes any type of contract is termed as contractor.

33.Define Tender:

Tender is a written offer submitted by the contractors in pursuance of the notification given to execute certain work under certain terms and conditions.

34.What are the Essentials of contract:

The contract language is law full .

The contract is made by parties competent to contract. The contract is made by free consent of the parties. The contract is made under valid consideration.

There shall be a definite proposal and its acceptance.

35.What are the type of contract?

1. Item rate contract

2. Percentage rate contract

3. Lump-sum contract

4. Material supply contract

36.What are type of termination of contract?

Agreement Breach Performance Impossibility of performance Operation of provision of law Conditions relating to documents

Conditions relating to the execution of work Conditions relating to labour and personal