Consider a simple, homogeneous monocentric city with a circular shape. If the location rent premium at the center is $6,000 per year per acre, the rent at the edge of the city is $10,000 per year per acre, and the density is 2 persons per acre. Supposing that the annual transportation cost per person per mile of distance from the CBD is $200 (round- trip), and if the population increases by 10% (the size of the city and transportation cost do not change, and there are still 2 houses per acre), what will be the new rent at the center of the city per year per acre? Group of answer choices $16,500 $16,300 $16,600 $17,000

Consider a simple, homogeneous monocentric city with a circular shape. If the location rent premium at the center is $6,000 per year per acre, the rent at the edge of the city is $10,000 per year per acre, and the density is 2 persons per acre. Supposing that the annual transportation cost per person per mile of distance from the CBD is $200 (round- trip), and if the population increases by 10% (the size of the city and transportation cost do not change, and there are still 2 houses per acre), what will be the new rent at the center of the city per year per acre? Group of answer choices $16,500 $16,300 $16,600 $17,000

Essentials Of Investments

11th Edition

ISBN:9781260013924

Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.

Chapter1: Investments: Background And Issues

Section: Chapter Questions

Problem 1PS

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A new 2-lane road is needed in a part of town that is growing. At some point the road will need 4 lanes to handle the anticipated traffic. If the city’s optimistic estimate of growth is used, the expansion will be needed in 3 years. For the most likely and pessimistic estimates, the expansion will be needed in 6 and 10 years, respectively. The expansion will cost $4.9 million. Use an interest rate of 7%. (a) What is the PW for each scenario, and what is the range of values?
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Since the beginning of the fiscal year 2009, Texas Department of Transportation invest one million each year to build up the transportation management database system in one of the Southern Texas city regions. TxDot is planning to transfer this database system to the city authority by the end of the fiscal year 2020. If the rate of return is 12% per year during the investment period, what is the total value of this database system when transferring?
Use Annual Worth method to calculate the benefit/cost ratio at i = 6% for a new library. The first cost is $500K, and O&M costs are $100K per year. There is no salvage value after 30 years. Community benefits are estimated to be $130K per year. Is the library economically justified? Write a brief interpretation of your answer
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Perform a financial analysis for a project. Assume that the projected costs and benefits for this project are spread over 6 years as follows. Estimated costs are $1,100,000 in Year 0, and $50,000 each year in Years 1, 2, 3, 4, 5 and 6. Estimated benefits are $0 in Year 0, and $450,000 each year in Years 1, 2, 3, 4, 5 and 6. Use a 15% discount rate. Suppose the required payback period and discounted payback period are both 3 years. (1) Calculate the payback period (based on the original cash flows without discounting), and evaluate the project based on the payback method. (2) Calculate the discounted payback period (based on discounted cash flows), and evaluate the project based on the discounted payback method. (3) Evaluate the project using the NPV method, and explain whether you would recommend investing in this project.
1
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