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

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

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Analysis.

Solve using formula for present worth and future worth method.Write the answer.

Economic Study Methods
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
.
Building investment
• Study period
Cost of land after 20 years
• Cost of building after 20 years
•
Rent per unit per month
•
Upkeep per unit per year
• Property taxes
• Insurance
P5,000,000
P7,000,000
20 years
20,000,000
2,000,000
6,000
500
1%
0.50%

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