Reference no: EM132172665
Question: In a housing project the following sequence of events occurs.
• At the start of the project (time zero), land is bought at $1,000,000
• Two months later, $100,000 is paid to the architect for preparing the design
• In month 4, construction is started and the cost of construction (labor and material) is $150,000 per month
• Every month, one house is built (a total of 12 houses); the first one is ready for sale in month 6
• During every month starting from month 8, one house is sold for a price of $150,000 each
• After all of the houses are built and before all are sold, the cost of maintaining the site is $10,000 per month Draw the cash flow diagram.
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Calculate the npw by using given data
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How much more will you gain or lose per year
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What annual effective rates of interest had the bank given
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What is the corresponding effective annual interest rate
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Draw the cash flow diagram using given information
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Interpret the results of Cobb-Douglas production function
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