Determine the pessimistic and optimistic

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The first cost of a new building is $3,000,000. Target ROI on investments is 20%. It is estimated to have a life of 30 years with salvage value of $50,000. It is possible that it will last as long as 40 years with a salvage value of zero and teardown costs of $100,000. Or it may last 25 years and could be sold for $100,000. Annual taxes, insurance, maintenance, and other annual costs are expected to he $100,000 per year, but they could be as high as $150,000 per year or as low as $90,000 per year. Using what-if calculations, determine the pessimistic, optimistic, and most likely total annual costs, A_T, Of the structure.

Reference no: EM131524956

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