Thread: ecnomics help.
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Old January 3rd, 2009, 06:25 AM
abz abz is offline
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Default ecnomics help.

a)Consider a situation in which a property developer had to choose between four sites, A, B, C and D for a new housing estate. The major choice criteria were: transport system; cost of land; availability of local labour; soil conditions; and land ownership.

Describe and valuate:
i.A holistic evaluation approach to recommend a site for the property developer to acquire and develop.

ii.Aheuristic elimination approach to recommend a site for the property developer to acquire and develop.

b) A plant hire company is considering buying a new piece of plant, which will be used for five years and then scrapped. Two identical models (A and B) are available. Model A costs £90,000 and has annual operational costs of £10,000. Model B costs £40,000 and has annual operational costs of £20,000. The cost of capital to the company to provide money for the chosen equipment is 10% per year. Which model should the company buy and why? State any assumptions made.
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