A city is considering to buy a piece of land and constructing an office complex on it. Their planning horizon is 20 years. Three mutually exclusive building designs have been drawn up by the architectural firm. Use MARR of 10% per year to determine which alternative, if any, should be recommended to the city council. Use FW Method. Cost of building + land Resale value after 20 years Design A $1,300,000 $500.000 Design B $1,700,000 $900 000 Design C $3,500,000 $2.000.000

ENGR.ECONOMIC ANALYSIS
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ISBN:9780190931919
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Chapter1: Making Economics Decisions
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What is FW of A? No need to write the $ sign.

ASSI
A city is considering to buy a piece of land and
constructing an office complex on it. Their planning
horizon is 20 years. Three mutually exclusive building
designs have been drawn up by the architectural firm.
Use MARR of 10% per year to determine which alternative,
if any, should be recommended to the city council. Use FW
Method.
Cost of building + land
Resale value after 20 years
Annual net rental income
Design A
$1,300,000
$500,000
$120,000
Design B
$1,700,000
$900,000
$300,000
Design C
$3,500,000
$2,000,000
$450,000
Transcribed Image Text:ASSI A city is considering to buy a piece of land and constructing an office complex on it. Their planning horizon is 20 years. Three mutually exclusive building designs have been drawn up by the architectural firm. Use MARR of 10% per year to determine which alternative, if any, should be recommended to the city council. Use FW Method. Cost of building + land Resale value after 20 years Annual net rental income Design A $1,300,000 $500,000 $120,000 Design B $1,700,000 $900,000 $300,000 Design C $3,500,000 $2,000,000 $450,000
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