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4.1 Misha Dairy is considering buying a new farm for $1,900,000 and constructing a distribution center on it. Three different buildings are being analyzed. 2

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4.1 Misha Dairy is considering buying a new farm for $1,900,000 and constructing a distribution center on it. Three different buildings are being analyzed. 2 Stories 5 Stories $700,000 $1,500,000$4,100,000 $2,000,000 $2,500,000 $3,500,000 $105,000 10 Stories Building Height Initial Cost (excludes land) Resale value" of land+building after 20-year horizon Annual net rental income $70,000 $256,000 * Resale value considered a reduction In cost - not a benefit. Using benefit-cost ratio analysis and an 12% MARR, determine which alternative, if any, should be selected. a) Calculate the B/C Ratios of each individual building design. [3 points] b) Conduct an incremental B/C analysis. Based on your analysis, which alternative should be selected? [3 points]

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