Your company owns a parcel of land in a currently undevelope…
Your company owns a parcel of land in a currently undeveloped part of the county. As the neighboring city grows eastward, you believe there is a 50% chance of residential development, a 20% chance of industrial development, and a 30% chance of no development of the area surrounding the parcel of land. If you build a gas station and the land is developed residentially the station will have a present worth of $250,000. A station in an industrial area will have a present worth of $200,000 and in an undeveloped area a present COST of $10,000. What is the expected monetary value (EV) of the gas station?
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