Sunbelt Corporation, an investment company, is considering building a 50 unit student apartment complex in a growing area near BIUST, in Palapye. Since the long-term growth potential of the town is excellent, it is believed that the company could average 85% full occupancy for the complex each year. If the following financial data are reasonably accurate estimates, determine the minimum monthly rent that should be charged if a 15% rate of return is desired: Land investment cost = P1 000 000 Building investment cost = P15 000 000 Annual upkeep cost = P150 000 Property taxes and insurance = 5% of total initial investment Study period = 25 years Salvage value = only land cost can be recovered in full Insert your answer to 2 decimal places with no units.

Sunbelt Corporation, an investment company, is considering building a 50 unit student apartment complex in a growing area near BIUST, in Palapye. Since the long-term growth potential of the town is excellent, it is believed that the company could average 85% full occupancy for the complex each year. If the following financial data are reasonably accurate estimates, determine the minimum monthly rent that should be charged if a 15% rate of return is desired: Land investment cost = P1 000 000 Building investment cost = P15 000 000 Annual upkeep cost = P150 000 Property taxes and insurance = 5% of total initial investment Study period = 25 years Salvage value = only land cost can be recovered in full Insert your answer to 2 decimal places with no units.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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