NVI Technical College Information

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Remaining Useful Life: Estimated period during which a property of a certain effective age is expected to continue to be profitably used for the purpose for which it was intended.

Desktop Analysis: The desktop analysis identifies and values assets without inspecting and listing them, by relying on documents and other information provided by the client or others.

DATA PROVIDED

To assist in our analysis, BVI provided CAA with asset inventory schedules that included the subject assets. The primary fields contained in the asset file consisted of asset description, manufacturer, model, serial and vehicle identification numbers, and estimated asset acquisition costs.

As previously presented, we accepted the asset inventory file as properly describing the subject assets. Should any of the provided data prove to be inaccurate, the appraiser reserves the right to revise the steps performed in arriving at the value estimate.

VALUATION THEORY

Three basic appraisal methods are used to derive an indication of the value of the assets: the cost approach, the sales comparison approach, and the income approach.

COST APPROACH

The cost approach incorporates the economic principle of substitution that states: an informed purchaser would pay no more for a property than the cost of purchasing or producing a substitute property with the same utility as the valued property. The cost approach is based on the current cost to recreate or duplicate the asset less an appropriate allowance for depreciation from all causes; physical, age, functional and economic. Reproduction or replacement cost new is typically estimated using one of two approaches: indirect or direct. The indirect approach applies equipment-specific indices to the historical cost of an asset to estimate current replacement cost. The direct approach involves using published sources, cost estimating techniques, and input from dealers and manufacturers to estimate current value of existing assets.

SALES COMPARISON APPROACH

The sales comparison approach is an indication of value based on comparing sales of similar property recently sold or the buying/asking prices of similar items to the property being valued. Using similar units of comparison, adjustments are made to the comparable assets for various factors including condition, capacity, age, etc. to correlate to the subject asset. It is assumed that market transactions are conducted between willing

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