Question
The second section of Group Project 1 is designed to resemble the kind of situation and problems you will often encounter as a group of
The second section of Group Project 1 is designed to resemble the kind of situation and problems you will often encounter as a group of analysts working at a business firm. It involves writing a whole report for your client. You are the group of resident economic experts of Maltana Building Enterprise, which is a commercial real estate developer. Your responsibilities are such that you as a group report directly to Susan Smith, the Vice President of External Relations and Development. Today Susan has sent your group an email asking you to work on a project that has to be completed in about a week. She has advised all members of your group to see her to discuss the project. When you stop by Susans office later in the day, she tells you that Maltana is thinking about leasing a piece of land where it can build a shopping center. Maltana would own and operate the shopping center, but the idea is to generate revenue by renting space to retailers. Susan would like you to do some work that would help estimate the prospect of the project. Specifically, she would like you to answer the following questions. 1. What is the optimal size of the shopping center (to the nearest 100 square meters) based on existing estimates of the demand for retail space? 2. What is the most Maltana should be willing to pay to lease the land for the expected life of the project? 3. What is the amount of profit under each possible demand curve with the optimum size of the shopping centre? 4. Is it worth hiring a local consultant, Dave Heath, to do some additional market research that would provide a better estimate of the demand for retail space? If so, then what is the maximum consulting fee that Maltana should offer to Dave? Susan asks you to write a short report summarising the results of your analysis and any recommendations you would like to make. Susan also informs you that, Mark Bernstein, a former employee of Maltana, did some baseline work on the project. Susan says that you should have complete confidence in any work Mark did on the project and that you should use his findings and assumptions as a starting point for your analysis. In fact, Susan has reviewed Marks notes and quickly summarises the key information she thinks youll need for your analysis. Specifically, she tells you that: i) Mark thought the shopping center would take one year to build and would last 20 years. He estimated that it would cost $100 per square meter to build and that the annual operations and maintenance costs would be $1 per square meter of floor space.
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started