Business, 02.04.2020 03:20 mecennabosaaen
An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed.
Building Height
2 Stories 5 Stories 10 Stories
Cost of building (excluding cost of land) $500,000 $900,000 $2,200,000
Resale value of land building after 20-year horizon 200,000 300,000 350,000
Annual net rental income 70,000 110,000 215,000
Required:
Using benefit-cost ratio analysis and a 7% MARR, determine which alternative, if any, should be selected.
Answers: 2
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An investor is considering buying some land for $100,000 and constructing an office building on it....
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