What is the estimated capital investment

Assignment Help Finance Basics
Reference no: EM13821487

A commercial building design cost $91 /square-foot to construct eight years ago (for an 77,000.square-foot building). This construction cost has increased 5.5%, per year since then. Presently, your company is considering construction of a 130,000.square-foot building of the same design. The cost capacity factor is X = 0.91. In addition, it is estimated that working capital will be 4%, of construction costs, and that project management, engineering services, and overhead will be 4.2% 8%, and 30% respectively, of construction costs. Also, it is estimated that annual expenses in the next year of operation will be $6/square foot, and these are estimated to increase 5.67% per year thereafter. The future general inflation rate is estimated to be 6.69% per year, and the market-based MARR = 12%, Per Year (im).

a. What is the estimated capital investment for the 130,000-square-foot .

b. Based on a before-tax analysis, what is the PW for the first 10 years of owmership of the building.

c. What is the AW for the first 10 years of owmership of the building in real dollars R$.

Reference no: EM13821487

Questions Cloud

Explaining the demonstrative communication : Write a 700- to 1,050-word paper describing demonstrative communication, which includes nonverbal and unwritten communication and involves such things as facial expressions, tone of voice, and body language. Include the following elements in your ..
Write an essay about the nature of competition in markets : Write an essay about the nature of competition in markets, market structure, market concentration, barriers to entry, uncompetitive practices, regulation issues and any other theoretical concepts that will inform your analysis.
Purpose of auditing-other assurance services and accounting : Write a paper of no more than 700 words describing and stating the purpose of auditing, other assurance services, and accounting. State the relationships between the three and provide examples.
Write three to five pages paper on cultural anthropology : Write three to five pages paper on cultural anthropology
What is the estimated capital investment : What is the estimated capital investment for the 130,000-square-foot. Based on a before-tax analysis, what is the PW for the first 10 years of owmership of the building.
Emphasize the importance of identifying critical path : Emphasize the importance of identifying critical path on projects and the manner in which one wouldallocate resources to all of the activities on the critical path.
How you feel about adjustable rate mortgages : An explanation of your understanding of what loans really cost to consumers, and How you feel about adjustable rate mortgages (ARMs) and borrowing practices.
A brief review of the current empirical research : A brief review of the current empirical research regarding the construction of the nervous system and its role in shaping behavior. A discussion of the controversies surrounding research on the nervous system.
Individual assignment: widget production : Individual Assignment: Widget Production

Reviews

Write a Review

Finance Basics Questions & Answers

  Difference between a fee-for-service plan

Determine a key difference between a fee-for-service plan and an episode of care payment plan, and indicate the plan that you believe to be most advantageous for the majority of patients. Provide support for your rationale.

  Determining subprime mortgage crisis

What are the risks which are associated with debt, and why may those risks be unacceptable to the corporation that needs money?

  Use technology to help establish a personal financial plan

specifically address the following required elements1. use working knowledge of personal finance to construct a

  The corrado corporation expects an ebit of 5000 every year

the corrado corporation expects an ebit of 5000 every year forever. corrado currently has no debt and its cost of

  Discussion on reserve currency

The US dollar is the world's reserve currency. China, Russia, and other smaller countries are increasingly voicing a desire for a new currency to replace the US dollar as the world reserve. Why?

  Would a current ratio that is less than one for a company

a how do business managers determine that acquiring a given working capital asset would help their company

  What is the npv of the alaska purchase

United States purchased Alaska in 1867 for $7.2M (where M stands for million). Assume that federal tax revenue from the state of Alaska (net federal expenditures) is $55.7M in 2011 and that tax revenue started in 1868 and has steadily increased by 3%..

  In the area of corporate governance is the structure of the

the genius of the chartered joint stock company was that it locked in financial capital that was the key resource

  What is the firm annual breakeven volume in units

Assume the following facts about a firm that sells just one product: Selling price per unit = $24.00 Variable costs per unit = $18.00 Total monthly fixed costs = $2,500 What is the firm's annual breakeven volume in units?

  Calculating the weighted cost of capital for a firm

In this task, you will be calculating the weighted cost of capital for a firm using the book value of the components and the concepts presented in this phase.

  What will be the net cash flow for year one of this project

The firm has a tax rate of 30 percent, an opportunity cost of capital of 12 percent, and it expects net working capital to increase by $57,000 at the beginning of the project. What will be the net cash flow for year one of this project?

  George smith is an analyst in the risk management

george smith is an analyst in the risk management department and he is reviewing a pool of mortgages. prepayment risk

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd