Question
An engineer is planning to build a one-story building (1000 m2 (50mx20m)) and lease it for $25.00 per m2 per month. 1a. What is the
An engineer is planning to build a one-story building (1000 m2 (50mx20m)) and lease it for $25.00 per m2 per month. 1a. What is the rate of return on this investment if the total capital cost of the building is $1,300,000? 1b. What would be the rate of return if they decided to add a second story to the proposed building and lease the whole building for $20.00 per m2 per month? Additional Data: A second story would double this size Adding a story would increase the structural costs from $600,000 to $900,000 and double the cost of the exterior enclosure that is $400,000 for the one-story building.
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