---
title: "Value of a 10-year-old building"
subject: "Construction Management"
chapter: 13
key: "semester_8/construction_management:value-building-10-years-2071"
source: https://www.bctengineer.com/q/semester_8/construction_management/value-building-10-years-2071
site: BCT Engineering
---

# Value of a 10-year-old building

Construction Management · Chapter 13: Valuation

- Asked in: 2071 Bhadra, 8 marks
- Answer checked by Claude Opus 5.5 (high effort) on 2026-10-14
- Page: https://www.bctengineer.com/q/semester_8/construction_management/value-building-10-years-2071
- Whole chapter: https://www.bctengineer.com/md/semester_8/construction_management/chapter-13

## Question

Calculate the value of a building built 10 years ago having a plinth area of 450 sqm, constructed in the land of 1000 sqm. Current market value of land is Rs. 15,000 per sqm and rate of building is Rs. 30,000 per sqm. Assume suitable data if necessary.

## Short answer

Using straight-line depreciation over 80 years with 10% scrap value, the building’s present value is Rs 1,19,81,250. Adding land value of Rs 1,50,00,000 gives a total property value of Rs 2,69,81,250 (about Rs 2.70 crore).

## Answer

**Assumptions:** RCC building with a total life of 80 years; scrap value = 10% of the cost; straight-line depreciation. The rate of Rs 30,000/m² is the present rate of construction.

**Land** = 1000 × 15,000 = Rs 1,50,00,000

**Present cost of building** = 450 × 30,000 = Rs 1,35,00,000

**Depreciation (straight line)**

$$
\begin{aligned}
\text{Annual depreciation} &= \frac{0.9 \times 1{,}35{,}00{,}000}{80} = Rs\ 1{,}51{,}875 \\
\text{Depreciation for 10 years} &= 10 \times 1{,}51{,}875 = Rs\ 15{,}18{,}750 \; (11.25\%)
\end{aligned}
$$

**Present value of building** = 1,35,00,000 − 15,18,750 = Rs 1,19,81,250

**Value of property** = land + building = 1,50,00,000 + 1,19,81,250 = Rs 2,69,81,250

**Answer: Value of the property is about Rs 2.70 crore (Rs 2,69,81,250).**

## Check yourself

The answer's key points as multiple-choice questions, with the correct option and why.

1. Present cost is 450 x 30,000 = Rs 1,35,00,000. What is annual depreciation?
   A. Rs 1,68,750
   B. Rs 1,51,875
   C. Rs 15,18,750
   D. Rs 1,35,000
   Answer: B. 0.9 x 1,35,00,000 / 80 = Rs 1,51,875. (Key point: Annual depreciation)

2. What is the building value after 10 years' depreciation?
   A. Rs 1,19,81,250
   B. Rs 1,35,00,000
   C. Rs 15,18,750
   D. Rs 1,50,00,000
   Answer: A. 1,35,00,000 - 15,18,750 = Rs 1,19,81,250. (Key point: Present value of building)

3. How is land treated in the valuation?
   A. Depreciated like the building
   B. Taken at current market value without depreciation
   C. Ignored
   D. Valued at building rate
   Answer: B. Land is Rs 1,50,00,000 at market rate, added to the building to give Rs 2,69,81,250. (Key point: Land treatment)

## Close variants set in other exams

- [Value of a 20-year-old building](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-building-20-years-2075) — Construction Management, chapter 13, asked 2×

## Related in Construction Management

- [Capitalized value of 80-year building](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-building-80-years-2078) — Construction Management, chapter 13
- [Fair market value of Tata Sipradi showroom](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-tata-sipradi-showroom) — Construction Management, chapter 13
- [Valuation of a cinema hall (land Rs 15 lakh)](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-cinema-hall-2077) — Construction Management, chapter 13, asked 2×
- [Job layout for 1000 sqm public building](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Ajob-layout-public-building-2079) — Construction Management, chapter 6
- [Loan value against mortgage of a building](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-building-mortgage-loan-2073) — Construction Management, chapter 13
- [Capitalized value of three-storied RCC building](https://www.bctengineer.com/question.md?key=semester_8%2Fconstruction_management%3Avalue-three-storey-rcc-2079) — Construction Management, chapter 13

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