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<br /> <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />Sale No. G1A (continued) <br /> <br />Winslow's eventual use of the property <br />is for sanitary fill. since he has almost <br />filled up to the property line to date. <br /> <br />Land Value <br /> <br />$5.000 per acre <br /> <br />The sale was made subject to a lease. and new purchaser <br />becomes the recipient of all royalties. Estimates of reserves. <br />time of removal and the cash consideration were furnished by <br />the parties. The royalty rate is set by contract. The only <br />real item of judgment is the allocation of total purchase price <br />between gravel value and residual value. . It appears that a <br />reasonable allocation for reversionary value of excavated land <br />at the end of approximately five years is $2.000 per acre. <br />This is consistent with the few sales of similar land with <br />which we are familiar in areas north of Denver. and is also <br />supported by Sale No. 54 which includes some excavated gravel <br />deposits and developed an average land value of $2.368 per <br />acre. which is slightly above the allocated value. Using 7.5% <br />interest on the value of the residual land as also being <br />consistent with our experience. the indicated interest rate <br />range for the gravel value is developed as follows: <br /> <br />Sale Price <br /> <br />$105.000 <br /> <br />Present Worth of Reversion: <br />21 acres @ $2.000 <br />5 years, 7.5% Factor <br /> <br />$42.000 <br />X 0.6966 <br /> <br />29,250 <br />$ 75,750 <br />$ 20.400 <br /> <br />Present Worth of Gravel Deposit <br /> <br />850.000 tons t 5 years X $0.12 m <br /> <br />$75.750 m 3.7132 Factor <br />$20.400 <br /> <br />Factor 3.7132. 5 years indicates 10%-11% rate <br /> <br />-22G- <br />