A young engineer is considering to built a 25unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, the project can have an earnings of 20% annually. Is this a good investment? Apply the methods of economic studies. Other data are the following:LandP10MBuilding cost14MProjected Useful lifeCost of land after 20 years20 years38MCost of Building after 20 years3.8MRent/unit/month13,000.00Maintenance/unit/year2,200.00Property TaxesBuilding Insurance2%0.7%

A rate of return (RoR) is the net profit or loss of an investment throughout a predetermined…

Answered: A young engineer is considering to…

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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A young engineer is considering to built a 25unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, the project can have an earnings of 20% annually. Is this a good investment? Apply the methods of economic studies.

Other data are the following:
Land
P10M
Building cost
14M
Projected Useful life
Cost of land after 20 years
20 years
38M
Cost of Building after 20 years
3.8M
Rent/unit/month
13,000.00
Maintenance/unit/year
2,200.00
Property Taxes
Building Insurance
2%
0.7%

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