An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed.

?????? Cost of building Resale value Annual income

2 stories $400,000 $200,000 $70,000

5 stories ?$800,000 $300,000 $105,000

10 stories $2,100,000 $400,000 $256,000???????????????????????????

??????????Using benefit-cost ratio analysis determine which alternative, if any, should be chosen. Use an 8% MARR and 20 year analysis period.