Pls provide cash flow diagram if needed PROBLEM #4:The owner of a corner lot wants to find a use that will yield a desirable return on hisinvestment. After much study and calculation, the owner decides that the two best alternatives are:Build Gas StationsBuild Ice Cream StandFirst Cost$80,000$120,000Annual property3,0005,000Annual income11,00016,000Life of building, in years.2020Salvage valueIf the owner wants a Minimum attractive rate of return on his investment of 6%, which of the twoalternatives would you recommend?

The economic benefit or loss is the difference between the income received from the sale of the…

Answered: First Cost $80,000 $120,000 Annual…

First Cost $80,000 $120,000 Annual property 3,000 5,000 Annual income 11,000 16,000 Life of building, in years. 20 Salvage value If th of 60/ ..hieh ofth 20

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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Question

Pls provide cash flow diagram if needed

PROBLEM #4:
The owner of a corner lot wants to find a use that will yield a desirable return on his
investment. After much study and calculation, the owner decides that the two best alternatives are:
Build Gas Stations
Build Ice Cream Stand
First Cost
$80,000
$120,000
Annual property
3,000
5,000
Annual income
11,000
16,000
Life of building, in years.
20
20
Salvage value
If the owner wants a Minimum attractive rate of return on his investment of 6%, which of the two
alternatives would you recommend?

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