Reference no: EM132464537

the owner of a downtown parking lot has employed a civil engineering consulting trim to advise him on the economic feasibility of constructing an office building on the site. bill samuels, a newly hired civil engineer, has been assigned to make the analysis. he has assembled the following data

alternative                   total investment                    total net annual revenue
sell parking lot                       0                                        0
keep parking lot                  200,000                              22,000
build 1 story building            400,000                             60,000
build 2 story building            555,000                             72,000
build 3 story building             750,000                           100,000
build 4 story building              875,500                          105,000
build 5 story building             1,000,000                         120,000

• the analysis period is be 15 years. for all alternatives, the property has an estimated resale(salvage) value at the end of 15 years equal to the present total investement.

Question (a) constuct a choice table for interest rate from 0% to 100%

Question (b) if the MARRR is 10%, what recommendation should bill make?

Attachment:- MRP.rar