What is the payback period for hudson hall

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Reference no: EM131916101

1A. The Board of Trustees approved plans to replace Hudson Hall with a larger dormitory bearing the same name adjacent to the current structure at a cost of $124 million. The new 520,521-square-foot building is planned to be over 50% larger than the current dorm and upon completion in 2020 will be able to house around 1,500 students.

If all 1,500 students' dorm fee is collected every semester, and if the $3,000 per semester residence fee for living in Hudson Hall remains the same, and if 60% of the residence fees is applied to the cost of the building, and if there are no interest fees to consider, and if only student dorm fees are applied to the capital fund, what is the payback period for Hudson Hall?

1B. If students begin living in Hudson Hall in 2020, and if the depreciation expense of the dorm is determined by the payback period, and if no other renovations or modifications are considered, in what year will the depreciated value of Hudson Hall reach $0?

Reference no: EM131916101

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