Question
You are interested in investing in a new construction project. You come across a study performed on buildings of a similar nature in a similar
You are interested in investing in a new construction project. You come across a study performed on buildings of a similar nature in a similar area. The study indicates that certain cost savings are obtained over a period of 20 years if green improvements to the value of 2% of the total cost to construct a building are made.
| Net present value cost (per square metre) |
Rental income | 1,500 |
Maintenance costs | 300 |
Cost savings: |
|
Water bill | 4.5 |
Electricity | 10.5 |
Maintenance | 52 |
The building you are interested in is 1,500m2 and will cost 1,000 per square metre to construct without any green improvements. What is the net present value of an investment in this building with green improvements
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