Dan Majerle has asked for your help in determining which of two hotels to buy.

The information for the two properties is listed below.

Driftwood Inn Island Home Resort Appraised value of land $400,000 10 acres at $95,000/acre Building cost 1,500,000 1,250,000 Age of property 3 years 8 years Remaining useful life 27 years 22 years Construction index when built 180 140 Construction index today 205 210 Required:

Advise Mr. Majerle as to the values of the two properties using the cost approach.

(Ignore furniture and equipment.)