2.A group of investors is planning to build an athletic equipment and apparel store in Saskatoon, close to a group of existing big box stores. The group spends $800,000 to buy the required land and to develop the parking lot. After completing these steps they terminate the project when they learn that another athletic store is going to be built close by. What option have the investors exercised? Three years later, the investors still own the land and improvements. How should they value these things if they decide at that time to complete the store as originally planned?

2.A group of investors is planning to build an athletic equipment and apparel store in Saskatoon, close to a group of existing big box stores. The group spends $800,000 to buy the required land and to develop the parking lot. After completing these steps they terminate the project when they learn that another athletic store is going to be built close by. What option have the investors exercised? Three years later, the investors still own the land and improvements. How should they value these things if they decide at that time to complete the store as originally planned?

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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