A young engineer is considering to built a 25unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, the project can have an earnings of 20% annually. Other data are the following: Land P10M Building cost Projected Useful life Cost of land after 20 years 14M 20 years 38M Cost of Building after 20 years Rent/unit/month 3.8M 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7% Is this a good investment? Apply the methods of economic studies.
A young engineer is considering to built a 25unit apartment near a commercial center. Because of the location, the investment can guarantee a 90% occupancy rate. So then, the project can have an earnings of 20% annually. Other data are the following: Land P10M Building cost Projected Useful life Cost of land after 20 years 14M 20 years 38M Cost of Building after 20 years Rent/unit/month 3.8M 13,000.00 Maintenance/unit/year Property Taxes Building Insurance 2,200.00 2% 0.7% Is this a good investment? Apply the methods of economic studies.
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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Transcribed Image Text:A young engineer is considering to built a 25unit apartment near a commercial center.
Because of the location, the investment can guarantee a 90% occupancy rate. So then, the
project can have an earnings of 20% annually. Other data are the following:
Land
P10M
Building cost
14M
Projected Useful life
Cost of land after 20 years
20 years
38M
Cost of Building after 20 years
Rent/unit/month
3.8M
13,000.00
Maintenance/unit/year
Property Taxes
Building Insurance
2,200.00
2%
0.7%
Is this a good investment? Apply the methods of economic studies.
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