A commercial building design cost $91/square-foot to construct eight years ago (for an 77,000-square-foot building). This construction cost has increased 5.5% per year since then. Presently, your company is considering construction of a 130,000-square-foot building of the same design. The cost capacity factor is X = 0.91. In addition, it is estimated that working capital will be 4% of construction costs, and that project management, engineering services, and overhead will be 4.2%, 8%, and 30%, respectively, of construction costs. Also, it is estimated that annual expenses in the first year of operation will be $6/square foot, and these are estimated to increase 5.67% per year thereafter. The future general inflation rate is estimated to be 6.69% per year, and the market-based MARR = 12% per year (im). Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. More Info a. What is the estimated capital investment for the 130,000-square-foot building? The estimated capital investment is $ million. (Round to two decimal places.) N 1 2 3 4 5 6 7 8 9 10 Discrete Compounding; i=12% Single Payment Compound Amount Factor To Find F Given P F/P 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 Present Worth Factor To Find P Given F P/F 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 Uniform Series Compound Present Sinking Worth Factor To Find P Given A P/A 0.8929 Amount Factor To Find F Given A F/A 1.0000 2.1200 Fund Factor To Find A Given F A/F 1.0000 1.6901 0.4717 3.3744 2.4018 0.2963 3.0373 0.2092 3.6048 0.1574 4.1114 0.1232 4.5638 0.0991 4.9676 5.3282 5.6502 Print 4.7793 6.3528 8.1152 10.0890 12.2997 14.7757 17.5487 Done 0.0813 0.0677 0.0570 Capital Recovery Factor To Find A Given P A/P 1.1200 0.5917 0.4163 0.3292 0.2774 0.2432 0.2191 0.2013 0.1877 0.1770 -X
A commercial building design cost $91/square-foot to construct eight years ago (for an 77,000-square-foot building). This construction cost has increased 5.5% per year since then. Presently, your company is considering construction of a 130,000-square-foot building of the same design. The cost capacity factor is X = 0.91. In addition, it is estimated that working capital will be 4% of construction costs, and that project management, engineering services, and overhead will be 4.2%, 8%, and 30%, respectively, of construction costs. Also, it is estimated that annual expenses in the first year of operation will be $6/square foot, and these are estimated to increase 5.67% per year thereafter. The future general inflation rate is estimated to be 6.69% per year, and the market-based MARR = 12% per year (im). Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year. More Info a. What is the estimated capital investment for the 130,000-square-foot building? The estimated capital investment is $ million. (Round to two decimal places.) N 1 2 3 4 5 6 7 8 9 10 Discrete Compounding; i=12% Single Payment Compound Amount Factor To Find F Given P F/P 1.1200 1.2544 1.4049 1.5735 1.7623 1.9738 2.2107 2.4760 2.7731 3.1058 Present Worth Factor To Find P Given F P/F 0.8929 0.7972 0.7118 0.6355 0.5674 0.5066 0.4523 0.4039 0.3606 0.3220 Uniform Series Compound Present Sinking Worth Factor To Find P Given A P/A 0.8929 Amount Factor To Find F Given A F/A 1.0000 2.1200 Fund Factor To Find A Given F A/F 1.0000 1.6901 0.4717 3.3744 2.4018 0.2963 3.0373 0.2092 3.6048 0.1574 4.1114 0.1232 4.5638 0.0991 4.9676 5.3282 5.6502 Print 4.7793 6.3528 8.1152 10.0890 12.2997 14.7757 17.5487 Done 0.0813 0.0677 0.0570 Capital Recovery Factor To Find A Given P A/P 1.1200 0.5917 0.4163 0.3292 0.2774 0.2432 0.2191 0.2013 0.1877 0.1770 -X
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
Related questions
Question
Transcribed Image Text:A commercial building design cost $91/square-foot to construct eight years ago (for an 77,000-square-foot building). This construction cost has increased 5.5% per year since then. Presently, your company is
considering construction of a 130,000-square-foot building of the same design. The cost capacity factor is X = 0.91. In addition, it is estimated that working capital will be 4% of construction costs, and that project
management, engineering services, and overhead will be 4.2%, 8%, and 30%, respectively, of construction costs. Also, it is estimated that annual expenses in the first year of operation will be $6/square foot, and
these are estimated to increase 5.67% per year thereafter. The future general inflation rate is estimated to be 6.69% per year, and the market-based MARR = 12% per year (im).
Click the icon to view the interest and annuity table for discrete compounding when i = 12% per year.
More Info
a. What is the estimated capital investment for the 130,000-square-foot building?
The estimated capital investment is $ million. (Round to two decimal places.)
N
1
2
3
4
5
6
7
8
9
10
Discrete Compounding; i=12%
Single Payment
Compound
Amount
Factor
To Find F
Given P
F/P
1.1200
1.2544
1.4049
1.5735
1.7623
1.9738
2.2107
2.4760
2.7731
3.1058
Present
Worth
Factor
To Find P
Given F
P/F
0.8929
0.7972
0.7118
0.6355
0.5674
0.5066
0.4523
0.4039
0.3606
0.3220
Uniform Series
Compound Present Sinking
Worth
Factor
To Find P
Given A
P/A
0.8929
Amount
Factor
To Find F
Given A
F/A
1.0000
2.1200
Fund
Factor
To Find A
Given F
A/F
1.0000
1.6901
0.4717
3.3744
2.4018
0.2963
3.0373
0.2092
3.6048
0.1574
4.1114
0.1232
4.5638
0.0991
4.9676
5.3282
5.6502
Print
4.7793
6.3528
8.1152
10.0890
12.2997
14.7757
17.5487
Done
0.0813
0.0677
0.0570
Capital
Recovery
Factor
To Find A
Given P
A/P
1.1200
0.5917
0.4163
0.3292
0.2774
0.2432
0.2191
0.2013
0.1877
0.1770
-X
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