Banking · Profits Method of Valuation
When assessing the value of a specialized commercial property (e.g., a standalone cinema hall) with no direct market comparables using the profits-based method, which data point is most critical?
Verified Solution4 OptionsUpdated: October 2026👁️1 View
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- 1The prevailing municipal circle rate for commercial bare land in that ward.
- 2The average replacement construction cost per square foot for similar setups.
- 3The audited profit and loss statements of the business operating within the premises for the last 3 to 5 years.✓
- 4The total floor area ratio (FAR) utilized by the existing building structure.
Correct answer
The audited profit and loss statements of the business operating within the premises for the last 3 to 5 years.
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