Parking Lot Example (Incremental ERR Review)

Parking Lot Example (Incremental ERR Review) - $82,000...

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Parking Lot Example (Incremental ERR Review) A developer is considering the purchase of a parking lot in downtown Memphis and has asked you to evaluate several alternative uses for the site. You’ve assembled the following cost and revenue estimates: Initial Annual Alternative Investment Revenue Keep as parking lot $200,000 $22,000 Build 1-story bldg. $400,000 $60,000 Build 2-story bldg. $555,000
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Unformatted text preview: $82,000 Build 3-story bldg. $750,000 $110,000 Build 4-story bldg. $875,000 $124,000 Build 5-story bldg. $1,000,000 $136,000 Youve chosen an analysis period of 15 years and, for simplicity, youve assumed that the salvage value at the end of 15 years is equal to the initial investment amount. If the developer wants at least a 12% return on his investment, what do you recommend he do?...
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This note was uploaded on 12/07/2011 for the course CIVL 4111 taught by Professor Moore,l during the Fall '08 term at U. Memphis.

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