Question: What is the office developments NPV if construction costs increase to $355,000? Assume the opportunity cost of capital is 12 percent. Is the development still

What is the office developments NPV if construction costs increase to $355,000? Assume the opportunity cost of capital is 12 percent. Is the development still a worthwhile investment? How high can development costs be before the project is no longer attractive? Now suppose that the opportunity cost of capital is 20 percent with construction costs of $355,000. Why is the office development no longer an attractive investment?

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