VERY EASY - PLEASE HELP

The owner of a downtown parking lot has employed a civil engineering consulting firm to advise him on the economic feasibility of constructing an office building on the site. Betty samuels, a newly hired civil engineer, has been assigned to make the analysis. he has assembled the following data

alternative total investment total net annual revenue sell parking lot 0 0 keep parking lot 200,000 22,000 build 1 story building 400,000 60,000 build 2 story building 555,000 72,000 build 3 story building 750,000 100,000 build 4 story building 875,000 105,000 build 5 story building 1,000,000 120,000

The analysis period is be 15 years. for all alternatives, the property has an estimated resale(salvage) value at the end of 15 years equal to the present total investement.

(a) constuct a choice table for interest rate from 0% to 100%

(b)if the MARRR is 10%, what recommendation should betty make?

(c)discuss the approach

(d)how you determined the solution to this investment decision

(e)what conclusions you reached

(f) write a brief summary of the calculations

*BE AS IN DEPTH AND BASIC AS POSSIBLE, EXPLAIN THE BASICS FOR C D E & F CLEARLY

THESE ARE THE ANSWERS FROM A PREVIOUS CHEGG QUESTION. PLEASE GO MORE IN DEPTH THAN HE DID.

(B) If MARR is 10%, Alternative 3, that is, building a 3 story building should be chosen.

(C) & (D) We reached our solution by using the NPV technique whereby we calculated the present value of all the cash flows under different alternatives at different MARR.

(E) If MARR is 5% or 10%, the alternatives are profitable. Above 15% MARR, the firm should just advice the owner to sell the parking lot.

10.37965804 7.606079506 5.847370099 4.675472642 3.268211224 2483929867 1.995432683 1.665221064 1.428072351 1.249814723 1.111037921 0.999969482 0.481017098 0.23392049 0.122894485 0064905472 0.019536633 0006428053 0.002283658 0000867362 0.000349354 0000148222 6.58713E-05 3.05176E-05 MARR Total Investment Sell Salvage Yalue Sell Net Present Value-For Choice (28,759 144,068) (55,644) 163,192) (88,513) 172474 175,544) [177,995) (65,783 (73,092) 182.343) 233,774) (308,846 (408,526) 372.58, 496,786) (410,061) (548,744) (663,481) (758,264) 434,623] (582,827) 699,393 [799,306] [451,985) (606,931) 724,747) (828,282) 464.931 (624,907) (743,640 (849,874) 474,969) 638,847) 758,283) 886,610) (482,985) (649,980) (769,977) (879,973) 152,122 ( (175,421 374,038] (588,278 695,500) 10.37965804 7.606079506 5.847370099 4.675472642 3.268211224 2483929867 1.995432683 1.665221064 1.428072351 1.249814723 1.111037921 0.999969482 0.481017098 0.23392049 0.122894485 0064905472 0.019536633 0006428053 0.002283658 0000867362 0.000349354 0000148222 6.58713E-05 3.05176E-05 MARR Total Investment Sell Salvage Yalue Sell Net Present Value-For Choice (28,759 144,068) (55,644) 163,192) (88,513) 172474 175,544) [177,995) (65,783 (73,092) 182.343) 233,774) (308,846 (408,526) 372.58, 496,786) (410,061) (548,744) (663,481) (758,264) 434,623] (582,827) 699,393 [799,306] [451,985) (606,931) 724,747) (828,282) 464.931 (624,907) (743,640 (849,874) 474,969) 638,847) 758,283) 886,610) (482,985) (649,980) (769,977) (879,973) 152,122 ( (175,421 374,038] (588,278 695,500)