The problem A young engineer is considering to built a 1 unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, he projects an earning 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 Rent/unit/month Maintenance/unit/year Property Taxes Building Insurance P10M 14M 20 years 38M 3.8M 15,000.00 2,200.00 1% 0.7% Is this a good investment? Apply the methods of economic studies.

The problem A young engineer is considering to built a 1 unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, he projects an earning 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 Rent/unit/month Maintenance/unit/year Property Taxes Building Insurance P10M 14M 20 years 38M 3.8M 15,000.00 2,200.00 1% 0.7% Is this a good investment? Apply the methods of economic studies.

ENGR.ECONOMIC ANALYSIS

14th Edition

ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

Problem 1QTC

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