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Homework Assignment #6

Question 17-1
How might land development activities be specialized? Why is this activity
different from project development discussed in the preceding chapter?

Question 17-2
What is an option contract? How is it used in land acquisition? What should
developers be concerned with when using such options? What contingencies may be
included in a land option?

Problem 17-1
Refer to Concept Box 17.1. A revised market study indicates the following: pricing for
standard interior lots will probably be $103,000 each, premium interior lots $118,000,
and corner lots $125,000; the average development cost has been revised up to $71,000
per lot; administrative costs, etc., remain at 12.5% of gross revenue.
a. Can the same 18% return on total cost continue to be maintained?

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