Posted: December 10th, 2014

Break-Even Analysis, Multiple Alternatives

Break-Even Analysis, Multiple Alternatives

Case Study: Break-Even Analysis, Multiple Alternatives
An architectural engineering firm has been asked to prepare preliminary plans for the construction of a one-story commercial building. To arrive at some quantitative basis for recommending a type of construction, the engineering firm develops fixed and variable cost data. These data, given below, are assumed to represent the cost of construction and operation for a building enclosing between 2,000 and 6,000 gross square feet.
Steel:
First cost per square foot                    $72
Annual maintenance                        $14,000
Annual HVAC per square foot                $3.00
Estimated life in years                        20
Estimated sale value is 80% of first cost
Concrete block:
First cost per square foot                    $76
Annual maintenance                        $9,000
Annual HVAC per square foot                $3.40
Estimated life in years                        20
Estimated sale value is 100% of first cost
Frame and brick:
First cost per square foot                    $81
Annual maintenance                        $6,000
Annual HVAC per square foot                $3.90
Estimated life in years                        20
Estimated sale value is 110% of first cost
The MARR is 18%. Determine the breakeven points and draw the 3 straight line relationships of annual equivalent cost and area in square feet. Define the type of construction recommended for each breakeven point. ( this is done by area)

PLACE THIS ORDER OR A SIMILAR ORDER WITH US TODAY AND GET AN AMAZING DISCOUNT 🙂