Question
A construction Company entered into a contract to build an apartment building. It is estimated that the building will cost $5,000,000 and will take 2
A construction Company entered into a contract to build an apartment building. It is estimated that the building will cost $5,000,000 and will take 2 years to complete. The MARR(minimum acceptable rate of returns) is 8%. The land cost 10 million $. The annual maintenance fees will be 5% of the initial investement (construction+land) for the first year and after it will increases of 5% each year. After 15 years they will sell the building for $12,000,000. How much should they charge for one apartment each month, if we want the project to be profitable?
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