Building Height 2 Stories 5 Stories 10 Stories Cost of building (excluding cost of land) $500,000 $900,000 $2,200,000 Resale value* of land + building after 20-year 200,000 300,000 350,000 horizon Annual net rental income 70,000 110,000 215,000 * Resale value considered a reduction in cost-not a benefit. Using benefit-cost ratio analysis and a 7% MARR, determine which alternative, if any, should be selected.

Structural Analysis
6th Edition
ISBN:9781337630931
Author:KASSIMALI, Aslam.
Publisher:KASSIMALI, Aslam.
Chapter2: Loads On Structures
Section: Chapter Questions
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An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed.

Building Height
2 Stories 5 Stories 10 Stories
Cost of building (excluding
cost of land)
$500,000 $900,000 $2,200,000
Resale value* of land +
building after 20-year
200,000 300,000 350,000
horizon
Annual net rental income
70,000
110,000 215,000
* Resale value considered a reduction in cost-not a
benefit.
Using benefit-cost ratio analysis and a 7% MARR, determine which
alternative, if any, should be selected.
Transcribed Image Text:Building Height 2 Stories 5 Stories 10 Stories Cost of building (excluding cost of land) $500,000 $900,000 $2,200,000 Resale value* of land + building after 20-year 200,000 300,000 350,000 horizon Annual net rental income 70,000 110,000 215,000 * Resale value considered a reduction in cost-not a benefit. Using benefit-cost ratio analysis and a 7% MARR, determine which alternative, if any, should be selected.
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