ENGR.ECONOMIC ANALYSIS
14th Edition
ISBN: 9780190931919
Author: NEWNAN
Publisher: Oxford University Press
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A condominium developer in Pattaya asked a local estate agent for advice about the sale
for a room at his newly developed condominium. The room size is 65 square meters. The real estate agent said
that a comparable condominium in a similar location is currently for sale asking for a price of THB 2.5 million
for a room of 40 square meters. Nevertheless, this new condominium has a sea view, for which customers are
willing to pay an additional THB 300,000. However, being located near the sea also has a disadvantage. Some
customers are afraid of tsunami, which reduces their value perception by THB 100,000. The total cost for the
developer for this new room is THB 550,000, out of which 250,000 is fixed costs.
3.1. From the case, how much (THB) is the reference value for a room at the new condominium?
3.2. How much is the positive differentiation value (THB) for a room at the new condominium?
3.3. How much is the negative differentiation value (THB) for a room at the new condominium?
3.4. How much is the economic value (THB) for a room at the new condominium?
3.5. How much is the
3.6. How much is the
3.7. Assuming the new condominium is priced at the economic value, how much is the contribution?
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