A plotted housing scheme on a site of 12 hectare has 60% saleable area

Q. A plotted housing scheme on a site of 12 hectare has 60% saleable area. The average unit cost of land development is INR 300 million per hectare. If the profit margin is 20%, then the selling price of land per hectare is_________million INR.

Ans: 600 to 600

Sol:

Total area of site = 12 hectare. Saleable area = 0.6 × 12 = 7.2 hectare.
Average unit cost of land development = 300 Million/ hectare.
To sale 60% of land, we need to develop entire 12-hectare land (Not only 7.2 hectare of saleable area)
Thus, total cost of land development of 12 hectare = 12 × 300 = 3600 Million.
A profit margin of 20% is expected over entire selling price.
Thus, selling price with 20% profit margin = 120/100 × 3600 = 4320 Million.
Thus, selling price per hectare (for only 7.2-hectare saleable area) = 4320/7.2 = 600 Million/ Hectare.