Valuation and Depreciation

JKSSB Junior Engineer (Civil) · Construction Planning and Management · 13 practice questions with answers and explanations: 7 Easy, 5 Medium, 1 Hard.

Sample questions

Sample Easy question 1

Obsolescence of a building is the loss of its value because:

  1. The land price has risen
  2. Its design or facilities have become out of date
  3. It has been rented
  4. It has been repainted
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Answer: B. It can happen even if the building is in good physical condition.

Sample Easy question 2

The straight-line depreciation per year is:

  1. Cost ÷ life
  2. (Cost − scrap value) ÷ life
  3. (Cost + scrap value) ÷ life
  4. Cost × rate of interest
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Answer: B. The same amount is written off each year.

Sample Easy question 3

The capitalised value of a property is:

  1. Gross income multiplied by the life
  2. Cost minus depreciation
  3. Net annual income divided by the years' purchase
  4. Net annual income multiplied by the years' purchase
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Answer: D. Years' purchase is 100 ÷ the rate of return in per cent.

Sample Medium question 4

The years' purchase at a 5% rate of return is:

  1. 20
  2. 50
  3. 5
  4. 10
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Answer: A. 100 ÷ 5 = 20.

Sample Medium question 5

The years' purchase for a rate of return of 8% is:

  1. 1.25
  2. 12.5
  3. 8
  4. 80
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Answer: B. 100 ÷ 8 = 12.5.

Sample Medium question 6

A property earns a net income of ₹80,000 a year and is valued at an 8% return. Its capitalised value is:

  1. ₹1,00,000
  2. ₹10,00,000
  3. ₹12,50,000
  4. ₹6,40,000
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Answer: B. 80,000 × 12.5 = ₹10,00,000.

Sample Hard question 7

A sinking fund of ₹1,000,000 has to be built in 10 years at 8% interest. The yearly instalment is about:

  1. ₹100,000
  2. ₹80,000
  3. ₹69,029
  4. ₹138,059
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Answer: C. I = S i ÷ [(1 + i)ⁿ − 1] = 1,000,000 × 0.08 ÷ (2.1589 − 1) = ₹69,029.

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