The problemA 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, theproject can have an earnings of 20% annually. Other data are the following:LandP10MBuilding costProjected Useful lifeCost of land after 20 yearsCost of Building after 20 years14M20 years38M3.8MRent/unit/month13,000.00Maintenance/unit/yearProperty TaxesBuilding Insurance2,200.002%0.7%Is this a good investment? Apply the future worth method

Given, Occupancy rate- 90% Earning rate- 20%

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 P10M 14M 20 years 38M 3.8M Rent/unit/month 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7%

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 P10M 14M 20 years 38M 3.8M Rent/unit/month 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7%

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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