Question

A real estate developer is considering the purchase a large 20 acre piece of farmland for $4 million. It will cost an additional $7 million to install roads, sidewalks, and utilities (water, hydro, gas, storm & sanitary sewers). The developer is planning on allocating these costs based on acreage. At the end of the process, the farmland will be converted and zoned into three types of land: industrial, commercial and residential. At this point, the developer plans on further developing the land into industrial buildings, commercial buildings and residential buildings. In order to encourage the real estate developer to develop this land, the City Council is allowing the developer to chose the zoning for this farmland project. The developer can either choose either residential, commercial or industrial zoning, or any combination of the three options. Information about developing the 20 acres of land is as follows Industrial Commercial Residential Final Selling Price per building (in $) 5.0 million 3.0 million $800,000 Variable cost per building (in $) 3.2 million 1.7 million $600,000 Land required per building (in acres) 1 per 3 acres 1 per 2 acres 10 per acre Maximum potential demand (in buildings) 2 4 100

          A real estate developer is considering the purchase a large 20 acre piece of farmland for $4 million. It will cost an additional $7 million to install roads, sidewalks, and utilities (water, hydro, gas, storm & sanitary sewers). The developer is planning on allocating these costs based on acreage.

At the end of the process, the farmland will be converted and zoned into three types of land: industrial, commercial and residential. At this point, the developer plans on further developing the land into industrial buildings, commercial buildings and residential buildings.

In order to encourage the real estate developer to develop this land, the City Council is allowing the developer to chose the zoning for this farmland project. The developer can either choose either residential, commercial or industrial zoning, or any combination of the three options.

Information about developing the 20 acres of land is as follows

Industrial Commercial Residential
Final Selling Price per building (in $) 5.0 million 3.0 million $800,000
Variable cost per building (in $) 3.2 million 1.7 million $600,000
Land required per building (in acres) 1 per 3 acres 1 per 2 acres 10 per acre
Maximum potential demand (in buildings) 2 4 100

A real estate developer is considering the purchase a large 20 acre piece of farmland for 4 million. It will cost an additional7 million to install roads, sidewalks, and utilities (water, hydro, gas, storm sanitary sewers). The developer is planning on allocating these costs based on acreage.

At the end of the process, the farmland will be converted and zoned into three types of land: industrial, commercial and residential. At this point, the developer plans on further developing the land into industrial buildings, commercial buildings and residential buildings.

In order to encourage the real estate developer to develop this land, the City Council is allowing the developer to chose the zoning for this farmland project. The developer can either choose either residential, commercial or industrial zoning, or any combination of the three options.

Information about developing the 20 acres of land is as follows

Industrial Commercial Residential
Final Selling Price per building (in ) 5.0 million 3.0 million800,000
Variable cost per building (in ) 3.2 million 1.7 million600,000
Land required per building (in acres) 1 per 3 acres 1 per 2 acres 10 per acre
Maximum potential demand (in buildings) 2 4 100

Added by Jose Luis S.

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