Suppose an Owner Is Trying to Decide Whether or Not

Multiple Choice

Suppose an owner is trying to decide whether or not to make improvements to her property. Given the following information, what would be the value added or potential loss if the improvements are undertaken? Current rent per square foot: $8.75, Anticipated rent per square foot: $14.50, Cost of improvements: $250,000, Square feet: 34,000.

A) Gain of $54,500
B) Loss of $54,500
C) Gain of $195,500
D) Loss of $195,500