What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution. A city is considering to buy a piece of land andconstructing an office complex on it. Their planninghorizon is 20 years. Three mutually exclusive buildingdesigns have been drawn up by the architectural firm.Use MARR of 10% per year to determine which alternative,if any, should be recommended to the city council. Use FWMethod.Cost of building + landResale value after 20 yearsAnnual net rental incomeDesign A$1,300,000$500,000$120,000Design B$1,700,000$900,000$300,000Design C$3,500,000$2,000,000$450,000

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What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.

ENGR.ECONOMIC ANALYSIS

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ISBN:9780190931919

Author:NEWNAN

Publisher:NEWNAN

Chapter1: Making Economics Decisions

Section: Chapter Questions

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Question

What is FW of Design A, Design B, and Design C. Which alternative should be chosen. Do not round off in the solution.

A city is considering to buy a piece of land and
constructing an office complex on it. Their planning
horizon is 20 years. Three mutually exclusive building
designs have been drawn up by the architectural firm.
Use MARR of 10% per year to determine which alternative,
if any, should be recommended to the city council. Use FW
Method.
Cost of building + land
Resale value after 20 years
Annual net rental income
Design A
$1,300,000
$500,000
$120,000
Design B
$1,700,000
$900,000
$300,000
Design C
$3,500,000
$2,000,000
$450,000

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