What is the total project cost assuming no escalation

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You are building a new house and you determine with your building program your house has 1752 net square feet of space. From your project management class you know houses are 80% efficient. The average cost for a house in Duluth is $326 a square foot in July 2017 dollars. Assume hard costs are 75% of the total project budget. (Use table below for escalations)

Answer the following questions:

1. What is the total gross square feet (GSF) of the house?

2. What is the construction cost of the house assuming no escalation?

3. What is the total project cost assuming no escalation?

4. Assume your estimated project cost is in July 2017 dollars. The construction will actually start in October of 2017 (month 1) and will have a construction duration of 12 months. Using the Minnesota escalation table, what is your new project budget?

July 2017: 0.00%

Midpoint: April 2018: 2.93%

5. The total project budget is $17,000,000, how much is likely available for construction

6. Construction estimates from the contractor are $12,000,000 which includes design and bidding contingency. Cost escalation is not a factor in this problem. What is the estimated total project cost?

7. Traders, Inc. is considering the acquisition of a new machine. After all the factors are considered (including initial costs, tax savings from depreciation, revenue from additional sales, and taxes on additional revenues), Traders projects the following cash flows from the machine:

Reference no: EM132152595

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