Question Owing to perennial complaints by students about the lack of accommodation problems on campus, a hostel on a university owned property is being considered. Since there are no university funds available for the project, students will have to pay for hostel fees for a 15 year period to enable the project be self-financing. A 10% MARR is deemed reasonable for consideration of how large the structure should be. Determine how many levels should be built. the income and cost data are presented below. No of Levels Cumulative Annual operation Income per year construction cost 1 600,000 35,000 100,000 2 2,200,000 60,000 350,000 3,600,000 80,000 570,000 1.800.000 95.000 810.000 3

Question Owing to perennial complaints by students about the lack of accommodation problems on campus, a hostel on a university owned property is being considered. Since there are no university funds available for the project, students will have to pay for hostel fees for a 15 year period to enable the project be self-financing. A 10% MARR is deemed reasonable for consideration of how large the structure should be. Determine how many levels should be built. the income and cost data are presented below. No of Levels Cumulative Annual operation Income per year construction cost 1 600,000 35,000 100,000 2 2,200,000 60,000 350,000 3,600,000 80,000 570,000 1.800.000 95.000 810.000 3

Excel Applications for Accounting Principles

4th Edition

ISBN:9781111581565

Author:Gaylord N. Smith

Publisher:Gaylord N. Smith

Chapter26: Capital Budgeting (capbud)

Section: Chapter Questions

Problem 5R

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