Your firm has been asked to determine the highest and best use of a center city lot. You will determine how tall a building to erect on the site using incremental analysis techniques. All relevant data is given in the problem. Once again, we expect this to be a one page summary with separate paragraphs addressing the four points listed above. This is not a letter. It is the first page of a report, so make it brief and to the point. Your name goes on the back not the front.
These assignments are to be one page in length and should convey the following information. Each paragraph accomplishes a specific task as follows :
1.) Orient the reader to what you have done and why
2.) Describe the approach to the problem
3.) Give results of your analysis ( not the analysis )
4.) Draw conclusions and recommend action
the owner of a downtown parking lot has employed a civil engineering consulting frim to advise him on the economic feasibility of constructing an office building on the site. bill 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 875,500 105,000
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 bill make?