Problem 9 [13 points total] The owner of a downtown parking lot asked you to advise her on the best economic alternative

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Problem 9 13 Points Total The Owner Of A Downtown Parking Lot Asked You To Advise Her On The Best Economic Alternative 1 (231.88 KiB) Viewed 14 times

Problem 9 [13 points total] The owner of a downtown parking lot asked you to advise her on the best economic alternative for her property. Three alternatives are under consideration: Net annual revenue Alternative Renovate parking lot Build 1-story building Initial investment $150,000 $30,000 $400,000 $55,000 Build 2-story building $600,000 $75,000 to The analysis period is 15 years. Salvage value is the same for all alternatives and can be ignored. The MARR is 7% annual effective. Remember to draw cash flow diagrams. A [3 points] Using the annual worth method, what is the best alternative? B [5 points] Using the benefit-cost ratio approach, what is the best alternative? C [5 points] Using the IRR approach, what is the best alternative?