2:48 1 of 4 elearn.memphis.edu UNIVERSITY OF MEMPHIS FOGELMAN COLLEGE OF BUSINESS AND ECONOMICS DEPARTMENT OF FINANCE, INSURANCE AND REAL ESTATE FIR 4340/6340 Problem Set #1 Mark Sunderman In working this problem set pay close attention to the instructions on our class web site. Remember, even though you can gain help in the threads, this is still an individual assignment. This assignment does not need to be typed; however, it is very important that you organize your answers clearly and legibly. Since I give partial credit, it is imperative that you show your work in a logical manner. In any written response, remember that I place more weight on content and organization than I do on quantity. You can deliver this assignment to me by posting it the "Dropbox" for this unit - see top bar for the tab for the Dropbox. Attaching it as a file in an e-mail to me is another possibility.1 After the due date, I will be posting the solutions on the web site, and once graded, I will be posting your grade in the grade book. If you would like me to return the problem set to you after I have graded it, please send me an e-mail with the address you would like it sent. This problem set is worth 75 points (question 1 is worth 15 points - questions 2 and 5 are each worth 20 points each question 3 and 4 are worth 10 points each). 1. The building being appraised has a current reproduction cost of $350,000, an effective age of 15 years, and a remaining physical life of 40 years. The following information on short-lived building components is also provided. Current Reproduction Cost to Cure Effective Age Total Physical Cost Curable Roof $8,000 Floor Cover Electrical System $6,500 $1,975 $1,000 11 Years Life 25 Years 6 Years 10 Years $9,000 $ 750 15 Years 40 Years Calculate the physical deterioration (curable, incurable--long-lived, and incurable-- short-lived). 2. In working on your regression assignment, you came up with the following SAS results (NOTE - this problem can be solved WITHOUT having worked on the 1 When you turn in the assignment make it clear what software the assignment is in. I can usually access most types of files, if I know what it is in! If I have problems opening the file, I will contact you (so please keep a copy of the file!). Also please put your name in the name of the file! Page 1 of 4