Capitalized Value Solution

STEP 0: Pre-Calculation Summary
Formula Used
Capitalized Value = Net Rental Income*Years Purchase
Cv = RN*Y
This formula uses 3 Variables
Variables Used
Capitalized Value - Capitalized Value is the amount of money whose annual interest at the highest prevailing rate of interest will be equal to the net income from the property.
Net Rental Income - Net Rental Income is calculated by deducting all outgoings from gross rent.
Years Purchase - Years Purchase in perpetuity is defined as the capital sum required to be invested in order to receive a net annual income of rs/- 1 at a certain rate of interest.
STEP 1: Convert Input(s) to Base Unit
Net Rental Income: 4800 --> No Conversion Required
Years Purchase: 11 --> No Conversion Required
STEP 2: Evaluate Formula
Substituting Input Values in Formula
Cv = RN*Y --> 4800*11
Evaluating ... ...
Cv = 52800
STEP 3: Convert Result to Output's Unit
52800 --> No Conversion Required
FINAL ANSWER
52800 <-- Capitalized Value
(Calculation completed in 00.004 seconds)

Credits

Created by Chandana P Dev
NSS College of Engineering (NSSCE), Palakkad
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Coorg Institute of Technology (CIT), Coorg
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17 Valuation Engineering Calculators

Annual Installment for Sinking Fund
Go Annual Installment = Sinking Fund*Rate of Interest/((1+Rate of Interest)^Number of Years Money is Invested-1)
Coefficient of Annual Sinking Fund
Go Coefficient of Sinking Fund = Rate of Interest/((1+Rate of Interest)^Number of Years Money is Invested-1)
Annual Sinking Fund using Sinking Fund Method
Go Annual Sinking Fund = Rate of Interest/((1+Rate of Interest)^Life of Asset in Years-1)
Percentage Rate of Annual Depreciation
Go Percentage Rate of Annual Depreciation = 1-(Scrap Value/Original Cost)
Years Purchase when Sinking Fund is Recovered
Go Years Purchase = 1/(Rate of Interest on Capital+Rate of Sinking Fund)
Rate of Sinking Fund given YP
Go Rate of Sinking Fund = (1/Years Purchase)-Rate of Interest on Capital
Coefficient of Annual Sinking Fund given Sinking Fund
Go Coefficient of Sinking Fund = Annual Installment/Sinking Fund
Annual Installment given Sinking Fund
Go Annual Installment = Coefficient of Sinking Fund*Sinking Fund
Sinking Fund for Buildings
Go Sinking Fund = Annual Installment/Coefficient of Sinking Fund
Capitalized Value using Profit Based Valuation
Go Capitalized Value = Net Rental Income*Years Purchase
Capitalized Value
Go Capitalized Value = Net Rental Income*Years Purchase
Gross Rent given Net Rent in Rental Method
Go Gross Rent = Net Rental Income+Outgoings of Repairs
Net Rent using Rental Method of Valuation
Go Net Rental Income = Gross Rent-Outgoings of Repairs
Outgoings using Rental Method
Go Outgoings of Repairs = Gross Rent-Net Rental Income
Net Income using Profit Based Valuation
Go Net Income = Gross Income-Outgoings of Repairs
Rate of Interest given Years Purchase
Go Rate of Interest = 100/Years Purchase
Years Purchase
Go Years Purchase = 100/Rate of Interest

Capitalized Value Formula

Capitalized Value = Net Rental Income*Years Purchase
Cv = RN*Y

What are the Disadvantages of Rental Method of Valuation?

The disadvantages are as under
1 If the actual rent is not fair rent, one cannot rely upon it.
2 A property of land and building valued together cannot be proportioned later.
3 Calculations of outgoings are often different.

How to Calculate Capitalized Value?

Capitalized Value calculator uses Capitalized Value = Net Rental Income*Years Purchase to calculate the Capitalized Value, The Capitalized Value formula is defined as the amount of money whose annual interest at the highest prevailing rate of interest will be equal to the net income from the property. Capitalized Value is denoted by Cv symbol.

How to calculate Capitalized Value using this online calculator? To use this online calculator for Capitalized Value, enter Net Rental Income (RN) & Years Purchase (Y) and hit the calculate button. Here is how the Capitalized Value calculation can be explained with given input values -> 52800 = 4800*11.

FAQ

What is Capitalized Value?
The Capitalized Value formula is defined as the amount of money whose annual interest at the highest prevailing rate of interest will be equal to the net income from the property and is represented as Cv = RN*Y or Capitalized Value = Net Rental Income*Years Purchase. Net Rental Income is calculated by deducting all outgoings from gross rent & Years Purchase in perpetuity is defined as the capital sum required to be invested in order to receive a net annual income of rs/- 1 at a certain rate of interest.
How to calculate Capitalized Value?
The Capitalized Value formula is defined as the amount of money whose annual interest at the highest prevailing rate of interest will be equal to the net income from the property is calculated using Capitalized Value = Net Rental Income*Years Purchase. To calculate Capitalized Value, you need Net Rental Income (RN) & Years Purchase (Y). With our tool, you need to enter the respective value for Net Rental Income & Years Purchase and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.
How many ways are there to calculate Capitalized Value?
In this formula, Capitalized Value uses Net Rental Income & Years Purchase. We can use 1 other way(s) to calculate the same, which is/are as follows -
  • Capitalized Value = Net Rental Income*Years Purchase
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