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. 15,000,000 P7,000,000 20 years 20,000,000 2,000,000 6,000 500 1% 0.50%
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. 15,000,000 P7,000,000 20 years 20,000,000 2,000,000 6,000 500 1% 0.50%
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Solve thetgiven question using PRESENT worth method and Future worth method
![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%](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F76f82bca-2e06-4b52-871e-030d9772d229%2F5e7afd91-00e4-4c36-8eab-6d4c250e49fe%2Fheoh9of_processed.jpeg&w=3840&q=75)
Transcribed Image Text: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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