A group of private investors borrowed $25 million to build 300 new luxury apartments near a large university. The money was borrowed at 8% annual interest, and the loan is to be repaid in equal annual amounts over a 40-year period Annual operating, maintenance, and insurance expenses are estimated to be $3,500 per apartment. This expense will be incurred even if an apartment is vacant. The rental fee for each apartment will be $10,000 per year, and the worst-case occupancy rate is projected to be 80%. Investigate the sensitivity of annual profit (or loss) to (a) changes in the occupancy rate and (b) changes in the annual rental fee Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. C

ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN:9780190931919
Author:NEWNAN
Publisher:NEWNAN
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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3/30/23, 5:01 PM
N
1
2
3
4
5
6
7
8
9
10
11
12
13
14
15
16
17
18
19
20
21
22
23
24
25
30
35
40
45
50
Single Payment
Compound
Amount
Factor
To Find F
Given P
FIP
1.0800
1.1664
1.2597
1.3605
1.4693
1.5869
1.7138
1.8509
1.9990
2.1589
2.3316
2.5182
2.7196
2.9372
3.1722
3.4259
3.7000
3.9960
4.3157
4.6610
5.0338
5.4365
5.8715
6.3412
Discrete Compounding; /= 8%
6.8485
10.0627
14.7853
21.7245
31.9204
46.9016
Present
Worth Factor
To Find P
Given F
PIF
0.9259
0.8573
0.7938
0.7350
0.6806
0.6302
0.5835
0.5403
0.5002
0.4632
0.4289
0.3971
0.3677
0.3405
0.3152
0.2919
0.2703
0.2502
0.2317
0.2145
0.1987
0.1839
0.1703
0.1577
0.1460
0.0994
0.0676
0.0460
0.0313
0.0213
Compound
Amount
Factor
To Find F
Given A
FIA
1.0000
2.0800
3.2464
4.5061
5.8666
7.3359
8.9228
10.6366
12.4876
14.4866
16.6455
18.9771
21.4953
24.2149
27.1521
30.3243
33.7502
37.4502
41.4463
45.7620
50.4229
55.4568
60.8933
66.7648
73.1059
113.2832
172.3168
259.0565
386.5056
573.7702
Uniform Series
Present
Worth Factor
To Find P
Given A
PIA
0.9259
1.7833
2.5771
3.3121
3.9927
4.6229
5.2064
5.7466
6.2469
6.7101
7.1390
7.5361
7.9038
8.2442
8.5595
8.8514
9.1216
9.3719
9.6036
9.8181
More Info
10.0168
10.2007
10.3711
10.5288
10.6748
11.2578
11.6546
11.9246
12.1084
12.2335
Sinking
Fund
Factor
To Find A
Given F
AIF
1.0000
0.4808
0.3080
0.2219
0.1705
0.1363
0.1121
0.0940
0.0801
0.0690
0.0601
0.0527
0.0465
0.0413
0.0368
0.0330
0.0296
0.0267
0.0241
0.0219
0.0198
0.0180
0.0164
0.0150
0.0137
0.0088
0.0058
0.0039
0.0026
0.0017
Capital
Recovery
Factor
To Find A
Given P
AIP
1.0800
0.5608
0.3880
0.3019
0.2505
0.2163
0.1921
0.1740
0.1601
0.1490
0.1401
0.1327
0.1265
0.1213
0.1168
0.1130
0.1096
0.1067
0.1041
0.1019
0.0998
0.0980
0.0964
0.0950
0.0937
0.0888
0.0858
0.0839
0.0826
0.0817
Transcribed Image Text:3/30/23, 5:01 PM N 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 30 35 40 45 50 Single Payment Compound Amount Factor To Find F Given P FIP 1.0800 1.1664 1.2597 1.3605 1.4693 1.5869 1.7138 1.8509 1.9990 2.1589 2.3316 2.5182 2.7196 2.9372 3.1722 3.4259 3.7000 3.9960 4.3157 4.6610 5.0338 5.4365 5.8715 6.3412 Discrete Compounding; /= 8% 6.8485 10.0627 14.7853 21.7245 31.9204 46.9016 Present Worth Factor To Find P Given F PIF 0.9259 0.8573 0.7938 0.7350 0.6806 0.6302 0.5835 0.5403 0.5002 0.4632 0.4289 0.3971 0.3677 0.3405 0.3152 0.2919 0.2703 0.2502 0.2317 0.2145 0.1987 0.1839 0.1703 0.1577 0.1460 0.0994 0.0676 0.0460 0.0313 0.0213 Compound Amount Factor To Find F Given A FIA 1.0000 2.0800 3.2464 4.5061 5.8666 7.3359 8.9228 10.6366 12.4876 14.4866 16.6455 18.9771 21.4953 24.2149 27.1521 30.3243 33.7502 37.4502 41.4463 45.7620 50.4229 55.4568 60.8933 66.7648 73.1059 113.2832 172.3168 259.0565 386.5056 573.7702 Uniform Series Present Worth Factor To Find P Given A PIA 0.9259 1.7833 2.5771 3.3121 3.9927 4.6229 5.2064 5.7466 6.2469 6.7101 7.1390 7.5361 7.9038 8.2442 8.5595 8.8514 9.1216 9.3719 9.6036 9.8181 More Info 10.0168 10.2007 10.3711 10.5288 10.6748 11.2578 11.6546 11.9246 12.1084 12.2335 Sinking Fund Factor To Find A Given F AIF 1.0000 0.4808 0.3080 0.2219 0.1705 0.1363 0.1121 0.0940 0.0801 0.0690 0.0601 0.0527 0.0465 0.0413 0.0368 0.0330 0.0296 0.0267 0.0241 0.0219 0.0198 0.0180 0.0164 0.0150 0.0137 0.0088 0.0058 0.0039 0.0026 0.0017 Capital Recovery Factor To Find A Given P AIP 1.0800 0.5608 0.3880 0.3019 0.2505 0.2163 0.1921 0.1740 0.1601 0.1490 0.1401 0.1327 0.1265 0.1213 0.1168 0.1130 0.1096 0.1067 0.1041 0.1019 0.0998 0.0980 0.0964 0.0950 0.0937 0.0888 0.0858 0.0839 0.0826 0.0817
A group of private investors borrowed $25 million to build 300 new luxury apartments near a large university. The money was borrowed at 8% annual interest, and the loan is to be repaid in equal annual amounts
over a 40-year period Annual operating, maintenance, and insurance expenses are estimated to be $3,500 per apartment. This expense will be incurred even if an apartment is vacant. The rental fee for each
apartment will be $10,000 per year, and the worst-case occupancy rate is projected to be 80%. Investigate the sensitivity of annual profit (or loss) to (a) changes in the occupancy rate and (b) changes in the
annual rental fee.
Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year.
Complete the table below (Round to the nearest thousands)
Rental Fee
$4,000
75%
80%
Occupancy Rate, $
85%
90%
95%
100%
Transcribed Image Text:A group of private investors borrowed $25 million to build 300 new luxury apartments near a large university. The money was borrowed at 8% annual interest, and the loan is to be repaid in equal annual amounts over a 40-year period Annual operating, maintenance, and insurance expenses are estimated to be $3,500 per apartment. This expense will be incurred even if an apartment is vacant. The rental fee for each apartment will be $10,000 per year, and the worst-case occupancy rate is projected to be 80%. Investigate the sensitivity of annual profit (or loss) to (a) changes in the occupancy rate and (b) changes in the annual rental fee. Click the icon to view the interest and annuity table for discrete compounding when the MARR is 8% per year. Complete the table below (Round to the nearest thousands) Rental Fee $4,000 75% 80% Occupancy Rate, $ 85% 90% 95% 100%
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