# A builder has located a piece of property that she would like to buy

A builder has located a piece of property that she would like to buy and eventually build on. The land is currently zoned for 4 homes per acre, but she is planning to request new zoning. What she builds depends on approval of the zoning request and your analysis of this problem to advise her. With her input and your help the decision process has been reduced to the following costs, alternatives and probabilities:

Cost of land: 2 mill USD

Probability of rezoning: 60%

If rezoned, an additional cost of 1 mill USD

If the land is rezoned the contractor must decide whether to build a shopping center or 1.500 apartments. If she builds a shopping center she estimates 70% chance that she can sell it to a large department chain for 4 mill USD over her construction cost (which excludes the cost of land), and she estimates 30% chance that she can sell it to an insurance company for 5 mill USD over construction cost.

If instead of the shopping center she decides to build the 1.500 apartments she places probabilities on her profit as follows: 60% chance that she can sell the apartments for 3.000 USD each over construction cost and 40% that she gets only 2.000 USD for each apartment.

If the land is not rezoned she can only build 600 homes on which she expects to make 4.000 USD each over construction cost (as before excluding cost of land).

Draw a decision tree of this problem and determine the best solution and the expected net profit.

We offer the best custom writing services. We have done this question before; we can also do it for you…

## Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
\$26
The price is based on these factors:
Number of pages
Urgency
Basic features
• Free title page and bibliography
• Unlimited revisions
• Plagiarism-free guarantee
• Money-back guarantee
On-demand options
• Writer’s samples
• Part-by-part delivery
• Overnight delivery
• Copies of used sources
Paper format
• 275 words per page
• 12 pt Arial/Times New Roman
• Double line spacing
• Any citation style (APA, MLA, Chicago/Turabian, Harvard)

# Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

### Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

### Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

### Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.