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

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

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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