Essentials Of Investments
11th Edition
ISBN: 9781260013924
Author: Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher: Mcgraw-hill Education,
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A car company has decided to spend $140M on a museum for exhibiting its classic cars. Land can be purchased for $650,000. The museum building will require 50,000 square feet of general space, while each car displayed will require an additional 1000 square feet. The design and planning process will cost $80,000, which should be paid immediately. The construction of the building will cost $550 per square foot, and the building will be
9-76 completed within the next 2 years, while the cost of construction A will be distributed evenly between the 2 years of construction. All
9-77 G
cars will be purchased during the second year of construction at an average cost of $95,000 per car. The annual operation of the museum will cost $1,750,000 plus $25,000 per car. If the funds are invested at 8% per year and the museum is to exist forever, how many cars can the trustees purchase? Contributed by Hamed Kashani, Saeid Sadri, and Baabak Ashuri, Georgia Institute of Technology
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