The city of Detroit is considering the construction of retail and office space in downtown Detroit. The city has narrowed the design alternatives to two designs. The cost and estimated revenue for each design are shown in the Table below. The city uses MARR of 12%. Design A Design B Capital investment: $22,000,000 $17,000,000 Annual operating and maintenance costs $250,000 $350,000 Major maintenance every 8th year $1,000,000 $750,000 Roof replacement, every 15th year $1,750,000 $1,750,000 Annual rental income 2,750,000 2,500,000 Cost to demolish the building at the end of its useful life $1,000,000 $1,000,000 + Useful life, Years 80 30 1. Draw the cash flow diagram for Design B (10 points) 2. Determine the capitalized worth of Design Bin A$ is (15 points)? 3. Determine the B-C ratio of Design B using the AW approach (10 points). Submit your solution and the cash flow diagram as a jpg, pdf or a word file Upload Choose a File The city of Detroit is considering the construction of retail and office space in downtown Detroit. The city has narrowed the design alternatives to two designs. The cost and estimated revenue for each design are shown in the Table below. The city uses MARR of 12%. Design A Design B Capital investment: $22,000,000 $17,000,000 Annual operating and maintenance costs $250,000 $350,000 Major maintenance every 8th year $1,000,000 $750,000 Roof replacement, every 15th year $1,750,000 $1,750,000 Annual rental income 2,750,000 2,500,000 Cost to demolish the building at the end of its useful life $1,000,000 $1,000,000 + Useful life, Years 80 30 1. Draw the cash flow diagram for Design B (10 points) 2. Determine the capitalized worth of Design Bin A$ is (15 points)? 3. Determine the B-C ratio of Design B using the AW approach (10 points). Submit your solution and the cash flow diagram as a jpg, pdf or a word file Upload Choose a File