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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

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
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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