Answered step by step
Verified Expert Solution
Link Copied!

Question

...
1 Approved Answer

A commercial building design cost $91 square foot to construct eight years ago for an 83,000 square-foot building). This construction cost has increased 5.5% per

image text in transcribedimage text in transcribed

A commercial building design cost $91 square foot to construct eight years ago for an 83,000 square-foot building). This construction cost has increased 5.5% per year since then. Present your company is considering construction or a 125,000-square-foot building of the same design The cost capacity factor is X = 0 93. In addition, it is estimated that working capital will be 5% of construction costs, and that project management, engineering services, and overhead will be 42%, 8%, and 32%, respectively, ot construction costs Also, t is estimated that annual expenses in the first year of operation will be $5/square foot and these are estimated to increase 5.67% per year thereafter The future general inflation rate is estimated to be 7.69% per year and the market-based MARR = 15% per year (1m). Click the icon to view the interest and annuity table for discrete compounding when i: 15% per year a. What is the estimated capital investment for the 125,000-square-foot building? The estimated capital investment is SO milion. (Round to two decimal places.) A commercial building design cost $91 square foot to construct eight years ago for an 83,000 square-foot building). This construction cost has increased 5.5% per year since then. Present your company is considering construction or a 125,000-square-foot building of the same design The cost capacity factor is X = 0 93. In addition, it is estimated that working capital will be 5% of construction costs, and that project management, engineering services, and overhead will be 42%, 8%, and 32%, respectively, ot construction costs Also, t is estimated that annual expenses in the first year of operation will be $5/square foot and these are estimated to increase 5.67% per year thereafter The future general inflation rate is estimated to be 7.69% per year and the market-based MARR = 15% per year (1m). Click the icon to view the interest and annuity table for discrete compounding when i: 15% per year a. What is the estimated capital investment for the 125,000-square-foot building? The estimated capital investment is SO milion. (Round to two decimal places.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Students also viewed these Accounting questions