2. TIle city council of Fayetteville is in the process of approving the construction of a new...

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2. TIle city council of Fayetteville is in the process of approving the construction of a new 200,000-ft2 convention center. Two sites have been proposed, and both require exercising the "eminent domain" law to acquire the property. The following table provides data about proposed (contiguous) properties in both sites together with the acquisition cost.

Site 1 Site 2 Property Area (1000 ft2) Cost (1000 $) Area (1000 ft2) Cost (1000 $)

1 20 1,000 80 2,800 2 50 2,100 60 1,900 3 50 2,350 50 2,800 4 30 1,850 70 2,500 5 60 2,950 Partial acquisition of property is allowed. At least 75% of property 4 must be acquired if site 1 is selected, and at least 50% of property 3 must be acquired if site 2 is selected.

Although site 1 property is more expensive (on a per fe basis), the construction cost is less than at site 2, because the infrastructure at site 1 is in a much better shape. COIlstruction cost is $25 million at site 1 and $27 million at site 2. Which site should be selected, and what properties should be acquired?

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