Colliers Calgary wants to assess the profitability of renovating an apartment building over the next

year. The costs would be $225,000 which includes all labour and materials. They have the required capital upfront so there is no need for a loan.

The inflation rate is 2% and the companys cost of capital is 7%. The companys Minimum Attractive Rate of

Return (MARR) must be at least 5% about inflation and its own cost of capital combined.

The projected benefits are expected to be $70,000 year after year for the next 7 years after the project is

finished and before the building needs another retrofit in order to comply with tougher environmental

standers. The project will take 1 year to complete.

Calculate:

Net Present Value (NPV) of this project

Internal Rate of Return (IRR)

Simple-Payback period

Cost-Benefit Ratio of the investmen