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Please show full solution on paper An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings
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An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed. Building Heights 2 stories 5 stories $400K $800K 10 stories $2.1M Cost of building excluding cost of land $200K $300K $400K Resale value of land + building after 20-year horizon $265K Annual net rental income $70K $105K *Resale value considered a reduction in cost - not a benefit. Using incremental benefit/cost ratio analysis and an 10% MARR, determine which alternative, if any, should be selected? An investor is considering buying some land for $100,000 and constructing an office building on it. Three different buildings are being analyzed. Building Heights 2 stories 5 stories $400K $800K 10 stories $2.1M Cost of building excluding cost of land $200K $300K $400K Resale value of land + building after 20-year horizon $265K Annual net rental income $70K $105K *Resale value considered a reduction in cost - not a benefit. Using incremental benefit/cost ratio analysis and an 10% MARR, determine which alternative, if any, should be selectedStep by Step Solution
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