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Which of the following is not included in the “Outgoings” while valuation of a building?
- a)Taxes
- b)Repairs
- c)Sinking fund
- d)Capital cost
Correct answer is option 'D'. Can you explain this answer?
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Verified Answer
Which of the following is not included in the “Outgoings” ...
Outgoings are the expenses which are required to be incurred to maintain the revenue of the building. The various types of the outgoings are as follows:
i) Taxes: Municipal tax, Property tax, Wealth tax etc
ii) Repairs
iii) Management and collection charges
iv) Sinking fund
v) Loss of rent
vi) Miscellaneous: This includes electric charges for running lift, pump, for lightning common places etc
Note: Capital cost is the total cost of construction including land, or the original total amount required to possess a property. It is the original cost and does not change.
Most Upvoted Answer
Which of the following is not included in the “Outgoings” ...
Capital cost
Outgoings in the valuation of a building refer to the expenses incurred in maintaining and operating the property. Capital cost, on the other hand, is a one-time expense related to the initial construction or acquisition of the building and is not considered as part of the ongoing outgoings.
Taxes, Repairs, and Sinking Fund
1. Taxes: Property taxes are a recurring expense that needs to be accounted for in the valuation of a building. These taxes are levied by the local government based on the assessed value of the property.
2. Repairs: Regular maintenance and repairs are essential to keep the building in good condition. These expenses are considered as outgoings in the valuation process to ensure that the property is properly maintained.
3. Sinking Fund: A sinking fund is set up to cover future major repairs or renovations of the building. Contributions to the sinking fund are made regularly to ensure that funds are available when needed for significant capital expenditures.
In conclusion, capital cost is not included in the outgoings while valuing a building because it is a one-time expense related to the acquisition or construction of the property, whereas outgoings typically refer to ongoing operating expenses.
Outgoings in the valuation of a building refer to the expenses incurred in maintaining and operating the property. Capital cost, on the other hand, is a one-time expense related to the initial construction or acquisition of the building and is not considered as part of the ongoing outgoings.
Taxes, Repairs, and Sinking Fund
1. Taxes: Property taxes are a recurring expense that needs to be accounted for in the valuation of a building. These taxes are levied by the local government based on the assessed value of the property.
2. Repairs: Regular maintenance and repairs are essential to keep the building in good condition. These expenses are considered as outgoings in the valuation process to ensure that the property is properly maintained.
3. Sinking Fund: A sinking fund is set up to cover future major repairs or renovations of the building. Contributions to the sinking fund are made regularly to ensure that funds are available when needed for significant capital expenditures.
In conclusion, capital cost is not included in the outgoings while valuing a building because it is a one-time expense related to the acquisition or construction of the property, whereas outgoings typically refer to ongoing operating expenses.
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Which of the following is not included in the “Outgoings” while valuation of a building?a)Taxesb)Repairsc)Sinking fundd)Capital costCorrect answer is option 'D'. Can you explain this answer?
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