1. A businessman is considering building a 25-unit apartment in a place near a progressive commercial center. He felt that because of the location of the apartment it will be occupied 90% at all time. He desires a rate of return of 20%. Other pertinent data are the following: • Land investment. P5,000,000 Building investment P7,000,000 • Study period after 20 years Cost of land P20,000,000 Cost of building after P2,000,000 • Rent per unit per month P6,000 • Upkeep per unit per year P500 • Property taxes 1% • Insurance 0.50% Is this a good investment? Solve using, a. Rate of Return Method b. Annual Worth Method c. Present Worth Method d. Future Worth Method

ENGR.ECONOMIC ANALYSIS
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1. A businessman is considering building a 25-unit apartment in a place near a progressive
commercial center. He felt that because of the location of the apartment it will be occupied
90% at all time.
He desires a rate of return of 20%. Other pertinent data are the following:
• Land investment. P5,000,000
Building investment P7,000,000
• Study period after 20 years
Cost of land P20,000,000
Cost of building after P2,000,000
•Rent per unit per month P6,000
• Upkeep per unit per year P500
• Property taxes 1%
• Insurance 0.50%
Is this a good investment? Solve using,
a. Rate of Return Method
b. Annual Worth Method
c. Present Worth Method
d. Future Worth Method
Transcribed Image Text:1. A businessman is considering building a 25-unit apartment in a place near a progressive commercial center. He felt that because of the location of the apartment it will be occupied 90% at all time. He desires a rate of return of 20%. Other pertinent data are the following: • Land investment. P5,000,000 Building investment P7,000,000 • Study period after 20 years Cost of land P20,000,000 Cost of building after P2,000,000 •Rent per unit per month P6,000 • Upkeep per unit per year P500 • Property taxes 1% • Insurance 0.50% Is this a good investment? Solve using, a. Rate of Return Method b. Annual Worth Method c. Present Worth Method d. Future Worth Method
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