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A commercial building design cost $89/square-foot to construct eight yrs ago (for an 80,000-square-foot building). This construction cost has increased 5.4% per year since then.

A commercial building design cost $89/square-foot to construct eight yrs ago (for an 80,000-square-foot building). This construction cost has increased 5.4% per year since then. Presently, your company is considering construction of a 125,000-square-foot building of the same design. The cost capacity factor is X = 0.92. In addition, it is estimated that working capital will be 5% of construction costs, and that project management, engineering services, and overhead will be 4.2%, 8%, and 31%, respectively, of construction costs. Also, it is estimated that annual expenses in the first year of operation will be $5/square-foot, and these are estimated to increase 5.66% per year thereafter. The future general inflation rate is estimated to be 7.69% per year, and

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