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27 October, 01:14

James owns a vacant property. By law, he can build the following building types, which generate a return on investment as listed: 1) Office building - 13.5% return 2) Mixed Use building - 10.5% return 3) Hotel - 12.8% return 4) Retail - 6.2% return Which use is the highest and best use for the property ... ?

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  1. 27 October, 02:36
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    Office building

    Explanation:

    The formula to compute the return on investment is shown below:

    Return on investment = Operating Income : Average Operating Assets

    It is a mix of operating income and the average operating assets through the return on investment could be computed

    Since the return on investment is already given in the question

    And, the higher return on investment is the best one for property use

    So the office building has a higher return on investment i. e 13.5% which reflects the best for property usage.
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