BASIC METHODS IN MAKING ECONOMY STUDIES Problem 1A newly-built business property of Ms. Theresa, containing space for astore and two offices, can be purchased for P1.2 million. Ms. Menche, aprospective buyer estimates that during the next 10 years she can obtain annualrentals of at least P273,000 from the property and that the annual out-of-pocketdisbursements will not exceed P60,000. She believes that she should be able todispose the property at the end of 10 years at not less than P700,000. Annualtaxes and insurance will total 2.5% of the firs cost. What is the Payback Periodof the investment if she had to borrow 25% of the required capital, on the basisof 10-year amortization with interest of 18%?

BASIC METHODS IN MAKING ECONOMY STUDIES Problem 1A newly-built business property of Ms. Theresa, containing space for astore and two offices, can be purchased for P1.2 million. Ms. Menche, aprospective buyer estimates that during the next 10 years she can obtain annualrentals of at least P273,000 from the property and that the annual out-of-pocketdisbursements will not exceed P60,000. She believes that she should be able todispose the property at the end of 10 years at not less than P700,000. Annualtaxes and insurance will total 2.5% of the firs cost. What is the Payback Periodof the investment if she had to borrow 25% of the required capital, on the basisof 10-year amortization with interest of 18%?

Fundamentals Of Construction Estimating

4th Edition

ISBN:9781337399395

Author:Pratt, David J.

Publisher:Pratt, David J.

Chapter9: Pricing Construction Equipment

Section: Chapter Questions

Problem 5RQ

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