Optimum Properties Corp. is considering the construction of a 50-unit condominium near the University Belt area. The 15-year investment study shows the following data: Disbursements Revenue Land P8000 000.00 Land, after 15 yrs P43 000 000.00 Building 25 000 000.00 Blds, after 15 yrs 8600 000.00 300 000.00 Maintenance/yr Insurance & Tax/ya With an estimated occupancy rate of 92% at all times, validate the acceptability of the project using Rent/unit-yr 120 000.00 1.2% the IRR method. The company applies a 15% MARR on its investments (Ans. Project is acceptable, 15.7%)
Optimum Properties Corp. is considering the construction of a 50-unit condominium near the University Belt area. The 15-year investment study shows the following data: Disbursements Revenue Land P8000 000.00 Land, after 15 yrs P43 000 000.00 Building 25 000 000.00 Blds, after 15 yrs 8600 000.00 300 000.00 Maintenance/yr Insurance & Tax/ya With an estimated occupancy rate of 92% at all times, validate the acceptability of the project using Rent/unit-yr 120 000.00 1.2% the IRR method. The company applies a 15% MARR on its investments (Ans. Project is acceptable, 15.7%)
Chapter10: Capital Budgeting: Decision Criteria And Real Option
Section: Chapter Questions
Problem 11P
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