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Vika [28.1K]
3 years ago
6

In January of 2015, the appropriate construction cost index had a value of $3,260. In January of 2005, the value was $1,746. In

January 2010 you received a bid for a structure of 7.25 million. Another building (virtually identical) is planned for a bid opening in January 2020. Estimate the new building bid.
Business
1 answer:
Dennis_Churaev [7]3 years ago
8 0

Answer:

11.63 million dollar

Explanation:

In 2005 the construction cost index was 1746 , in 2015 , it was 3260.

change in index in 10 years  = 3260-1746 = 1514

change in 5 years ( estimated ) = 757

Estimated index in 2010 = 1746 + 757

= 2503

Estimated index in 2020  = 3260 + 757

= 4017

Value of building in 2010 = 1746 million dollar

Value of similar building - X

X / 1746 = index in 2020 (probable ) / index in 2010

X / 7.25 = 4017 / 2503

X = 11.63 million dollar

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Answer:

Memorandum

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Subject: Re: Accounting treatment for the investments based on FASB Codification research

Purpose

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Details

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Issue:

1) To determine accurately the fair value of the security of a given firm or Company, the necessary three conditions to be met are:  

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