Refer to Concept Box 17.1. A revised market study indicates the following: pricing for standard interior lots
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Refer to Concept Box 17.1. A revised market study indicates the following: pricing for standard interior lots will probably be $103,000 each, premium interior lots $118,000, and corner lots $125,000; the average development cost per lot has been revised up to $71,000; administrative costs, etc., remain at 12.5 percent of gross revenue.
a. Can the same 18 percent return on total cost continue to be maintained?
b. Suppose the developer wants a 21 percent return on cost. How much can be paid for the land?
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Part A Revised revenues Required land cost to achieve ROC 32 103000 3296000 32 118000 3...View the full answer
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Related Book For 
Real Estate Finance and Investments
ISBN: 978-0073377339
14th edition
Authors: William Brueggeman, Jeffrey Fisher
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