Thus, the "role" of Standard 21.1, in the aforementioned context, is limited to presenting the result obtained, with regard to the expected profitability of the developer, given a certain plan that is examined by the appraiser, in relation to each of the compensation alternatives for the apartment owners. The standard assists the planning authorities in examining whether, within the framework of the particular plan under consideration, the addition of building areas of too low or too high a scope has been approved, given the purported interest of encouraging evacuation-reconstruction plans that on the one hand will be economically feasible, and on the other hand, the addition of areas in them will be minimal."
- Section 5.14 of Chapter A of Standard 21.1 specifies the components of the appraisal examination required for the purpose of examining the economic feasibility. Among other things, it is necessary to examine the existing situation, the estimate of the receipts (an estimate of the value of new apartments and other uses intended for marketing by the developer without VAT), the costs, as well as the entrepreneur's entrepreneurial profit from the project.
- Entrepreneurial profit is defined in Section 5.14.12 of Chapter A of the Standard:
"Entrepreneurial profit is the portion obtained from dividing the total income from the venture by the total expenses for its realization. Entrepreneurial profit expresses the appropriate return that the entrepreneur deserves for the risk he takes on himself, for the loss of the alternative return to his equity and for his personal benefit.
The appraiser, who makes the calculation in accordance with this standard, will calculate and present, in the conclusion of his opinion, the entrepreneurial profit deriving from the proposed planning, taking into account all the expenses and income deriving from the venture, as detailed in the standard."
- Chapter A of the Guideline Amendment states that it is necessary to examine whether the entrepreneurial profit constitutes a proper incentive for the realization of a Pinui-Binui plan, when in order to formulate an opinion regarding a proper entrepreneurial profit, the appraiser will take into account the entrepreneurial profit accepted at that time and in that area in accordance with the document "The Minimum Entrepreneurial Profit in Pinui-Binui Plans" published by the government appraiser and updated from time to time:
"Given the profit deriving from the proposed planning as stated in subsection 12 above, it is necessary to examine whether the profit obtained constitutes a proper incentive for the realization of the particular plan, which the appraiser will present in his opinion. For this purpose, consideration must be given to the fact that entrepreneurial profit, which constitutes a proper incentive, varies from venture to venture and is influenced by many factors. Thus, an evacuation-reconstruction project is usually carried out on a large scale, takes a long time, and has risk components that are not typical of other projects. Therefore, the rate of entrepreneurial profit in these projects is required to be higher than that of construction on vacant land, in the same place and at the same time, and taking into account the fact that the determining date for calculation, according to this standard, is the eve of the deposit, while the customary entrepreneurial profit is after the approval of the plan.