8-33 The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him on the economic feasibility of constructing an office building on the site. Betty Samuels, a newly hired civil engineer, has been assigned to make the anal- ysis. She has assembled the following data: Total Net Annual Total Investment Revenue $ 0 22,000 60,000 72,000 100,000 105,000 120,000 Alternative 0 $ Sell parking lot Keep parking lot Build 1-story building Build 2-story building Build 3-story building Build 4-story building Build 5-story building 1,000,000 $ 200,000 400,000 555,000 750,000 875,000 *Includes the value of the land. The analysis period is to be 15 years. For all alternatives, the property has an estimated resale (salvage) value at the end of 15 years equal to the present total investment. (a) Construct a choice table for interest rates from 0% to 100%.

8-33 The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him on the economic feasibility of constructing an office building on the site. Betty Samuels, a newly hired civil engineer, has been assigned to make the anal- ysis. She has assembled the following data: Total Net Annual Total Investment Revenue $ 0 22,000 60,000 72,000 100,000 105,000 120,000 Alternative 0 $ Sell parking lot Keep parking lot Build 1-story building Build 2-story building Build 3-story building Build 4-story building Build 5-story building 1,000,000 $ 200,000 400,000 555,000 750,000 875,000 *Includes the value of the land. The analysis period is to be 15 years. For all alternatives, the property has an estimated resale (salvage) value at the end of 15 years equal to the present total investment. (a) Construct a choice table for interest rates from 0% to 100%.

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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Problem 07.007 - Conventional B/C ratio for road improvement project The cost of grading and spreading gravel on a curvy rural road is expected to be $300,000. The road will have to be maintained at a cost of $34,000 per year. Even though the new road is not very smooth, it allows access to an area that previously could only be reached with off-road vehicles. The improved accessibility has led to a 144% increase in the property values along the road. If the previous market value of the property was $900,000, calculate the conventional B/C ratio using an interest rate of 6% per year and a 20-year study period. The conventional B/C ratio is
I GOT THE FOLLOWING WRONG ON AN ASSIGNMENT. CAN I GET SOME HELP SHOWING ME HOW TO GET THE RIGHT ANSWERS FOR THESE PLEASE <3 THANKS IN ADVANCE PART A) Pharoah Co. purchased land as a factory site for $408,000. The process of tearing down two old buildings on the site and constructing the factory required 6 months.The company paid $42,840 to raze the old buildings and sold salvaged lumber and brick for $6,426. Legal fees of $1,887 were paid for title investigation and drawing the purchase contract. Pharoah paid $2,244 to an engineering firm for a land survey, and $69,360 for drawing the factory plans. The land survey had to be made before definitive plans could be drawn. Title insurance on the property cost $1,530, and a liability insurance premium paid during construction was $918. The contractor’s charge for construction was $2,794,800. The company paid the contractor in two installments: $1,224,000 at the end of 3 months and $1,570,800 upon completion. Interest costs of $173,400…
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6. In a company's renovation of a small office building, two feasible alternatives for upgrading the heating, ventilation, and air conditioning (HVAC) system have been identified. Either Alternative A or Alternative Bmust be implemented. The costs are as follows: Alternative A: Rebuild (overhaul) the existing HVAC system V Equipment, labor, and materials to rebuild. v Annual cost of electricity v Annual maintenance expenses . ETB 18,000 ETB 32,000 ЕТВ 2,400 Alternative B: Install a new HVAC system that utilizes existing ductwork V Equipment, labor, and materials to install. v Annual cost of electricity. . ETB 60,000 .ЕТВ 9,000 V Annual maintenance expenses ETB 16,000 v Replacement of a major component four years hence.. ETB 9,400 At the end of eight years, the estimated market value for Alternative A is ETB 2,000 and for Alternative B it is ETB 8,000. Assume that both alternatives will provide comparable service (comfort) over an eight-year period, by using 8% discount rate Select the…
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Required information Skip to question [The following information applies to the questions displayed below.] Vancouver Shakespearean Theater's board of directors is considering the replacement of the theater's lighting system. The old system requires two people to operate it, but the new system would require only a single operator. The new lighting system will cost $73,950 and save the theater $15,000 annually for the next eight years. Use Appendix A for your reference. (Use appropriate factor(s) from the tables provided.) Suppose the Vancouver Shakespearean Theater's board is uncertain about the cost savings with the new lighting system. Required: How low could the new lighting system's annual savings be and still justify acceptance of the proposal by the board of directors? Assume the theater's hurdle rate is 12 percent. (Round final answer to 2 decimal places.)
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6) Suppose that you have to decide between three mutually exclusive alternatives regarding the manufacturing techniques of the plant you are working in as an engineer. Following list is given: Technique A (S) | Technique B ($) | Technique C ($) 20,000 7,000 4 First investment (initial cost) Salvage value Operating cost per hour Useful life (year) Here, system A, B, and operates 6, 12, and 20 hours a day, respectively. Assume that each are working 310 days per year. Assuming MARR is 12%, find the followings for each of these alternatives: a) Assuming a very long life for each, capitalized cost (CC)? b) Capital recovery (CR) c) Now suppose that revenue values for all are the same and given by $70,000. Which one would you prefer by using the AW analyses? 40,000 20,000 2 20 30,000 5,000 6 5 4.

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