Question: Rajiv owns a home in suburban Ottawa You obtain the

Rajiv owns a home in suburban Ottawa. You obtain the following information about the home:
a. Purchase price in 1978 $175,000
b. Selling price of a similar house on another street last year $625,000
c. Price offered (and turned down) for Rajiv's house two months ago $575,000
d. What it would cost to rebuild the house (on the same land) if it were destroyed $235,000

Explain how each of the measures of the "value" of Rajiv's house could be used by a decision maker. What decision would the person be making? How would the information be useful?

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  • CreatedFebruary 26, 2015
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