Garcia Developers Will Erect a Small Office Building at a Cost

question 25

Multiple Choice

Garcia Developers will erect a small office building at a cost of $4,500,000. They have a client who will lease the space for 5 years at a price that will produce free cash flows of $150,000 per year. For approximately how much would they need to sell the building for at the end of the 5th year to reach break-even NPV? Garcia uses a discount rate of 10% for projects of this type.

• A) $3,750,000
• B) $5,755,936
• C) $6,331,530
• D) $6,964,683

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Definitions:

Brain Size

A measure of the volume or mass of the brain, often related to an organism's cognitive abilities, but not the sole determinant of intelligence.

Dentition

Refers to the development, arrangement, and number of teeth in animals and humans.

Homo Heidelbergensis

An extinct species of archaic humans that lived approximately 600,000 to 200,000 years ago, known for their large braincase and robust build.

Homo Erectus

An extinct species of human that lived between 1.9 million and 143,000 years ago, known for their upright walking ability.