Correct Answer - Option 1 : Rs. 13,33,333 /-
Concept:
The capitalized value of a property 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.
To determine the capitalized value of a property, it is required to know the net income from the property and the highest prevailing rate of interest.
capitalized value = Net annual income × Year's purchase.
Where Year's purchase = 100/rate of interest
Net annual income = Capitalized value of property × ROI/100
Calculation:
Given,
Rate of Interest = 6%
Annual income = 80,000/- after deducting all outings.
80,000 = Capitalized value × (6/100)
Capitalized Value = 80,000 × (100/6)
Capitalized Value = 13,33,333.33/-