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. Other data are the following: Land Building cost Projected Useful life Cost of land after 20 years Cost of Building after 20 years Rent/unit/month P10M 14M 20 years 38M 3.8M 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7% Is this a good investment? Apply the rate of return method
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. Other data are the following: Land Building cost Projected Useful life Cost of land after 20 years Cost of Building after 20 years Rent/unit/month P10M 14M 20 years 38M 3.8M 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7% Is this a good investment? Apply the rate of return method
Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
Section: Chapter Questions
Problem 20P: Julie James is opening a lemonade stand. She believes the fixed cost per week of running the stand...
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![The problem
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. Other data are the following:
Land
Building cost
Projected Useful life
Cost of land after 20 years
Cost of Building after 20 years
Rent/unit/month
P10M
14M
20 years
38M
3.8M
13,000.00
Maintenance/unit/year
Property Taxes
Building Insurance
2,200.00
2%
0,7%
Is this a good investment? Apply the rate of return method](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F9fbd659d-c5e6-4ab3-a7c0-5367f280c3f8%2F1c7fdc7e-1960-4800-8018-f9e907929317%2F33fu2h_processed.jpeg&w=3840&q=75)
Transcribed Image Text:The problem
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. Other data are the following:
Land
Building cost
Projected Useful life
Cost of land after 20 years
Cost of Building after 20 years
Rent/unit/month
P10M
14M
20 years
38M
3.8M
13,000.00
Maintenance/unit/year
Property Taxes
Building Insurance
2,200.00
2%
0,7%
Is this a good investment? Apply the rate of return method
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