Let's break down the problem step by step. **Step 1: Calculate the anticipated revenue for the project by parcel type.** - Deluxe units: 17 units, each sells for $275,000 - Standard units: 58 units, each sells for $195,500 **Revenue calculation:** - Deluxe: \( 17 \times \$275,000 = \$4,675,000 \) - Standard: \( 58 \times \$195,500 = \$11,339,000 \) **Total anticipated revenue:** \[ \text{Total Revenue} = \$4,675,000 + \$11,339,000 = \$16,014,000 \] **Explanation (Step 1):** We multiply the number of each type of home by its expected selling price and sum the results to get the total anticipated revenue. --- **Step 2: What is the total interest carry (land plus hard costs)?** **Given:** - Land cost: $2,440,000 (to be paid upfront) - Direct development costs: $11,800,000 (incurred evenly over 1 year) - Interest rate: 10% for the land loan, 9% for the direct costs loan **Land interest (10% for 1 year):** \[ \text{Land Interest} = \$2,440,000 \times .10 = \$244,000 \] **Development costs interest (9% over 1 year, incurred evenly):** On average, half the money is used over the year, so interest is calculated on half the amount: \[ \text{Average balance} = \$11,800,000 / 2 = \$5,900,000 \] \[ \text{Interest} = \$5,900,000 \times .09 = \$531,000 \] **Total interest carry:** \[ \text{Total Interest} = \$244,000 + \$531,000 = \$775,000 \] **Explanation (Step 2):** Land interest is straightforward: 10% of the land cost. Development costs are incurred evenly, so we use the average balance for the year at a 9% rate. --- ### **Final Answers for Steps 1 and 2** 1. **Anticipated revenue:** **$16,014,000** 2. **Total interest carry (land plus hard costs):** **$775,000** Let me know if you'd like to continue with the next questions!

# Problem Breakdown The problem involves calculating anticipated revenue and total interest carry for a real estate project. Below are the steps for each calculation. ## Step 1: Calculate Anticipated Revenue ### Revenue by Parcel Type 1. **Deluxe Units:** - Quantity: 17 units - Selling Price per Unit: $275,000 - **Calculation:** \[ \text{Revenue from Deluxe} = 17 \times 275,000 = 4,675,000 \] 2. **Standard Units:** - Quantity: 58 units - Selling Price per Unit: $195,500 - **Calculation:** \[ \text{Revenue from Standard} = 58 \times 195,500 = 11,339,000 \] ### Total Anticipated Revenue - **Total Revenue Calculation:** \[ \text{Total Revenue} = 4,675,000 + 11,339,000 = 16,014,000 \] ### Explanation (Step 1) In this step, we calculated the revenue from two different types of units by multiplying the quantity of each unit by its selling price. The total anticipated revenue combines both sources. --- ## Step 2: Calculate Total Interest Carry ### Given Costs - **Land Cost:** $2,440,000 (paid upfront) - **Direct Development Costs:** $11,800,000 (incurred evenly over 1 year) - **Interest Rates:** - Land Loan: 10% - Development Costs Loan: 9% ### Interest Calculations 1. **Land Interest:** \[ \text{Land Interest} = 2,440,000 \times 0.10 = 244,000 \] 2. **Development Costs Interest:** - **Average Balance for Interest Calculation:** \[ \text{Average Balance} = \frac{11,800,000}{2} = 5,900,000 \] - **Interest Calculation:** \[ \text{Interest} = 5,900,000 \times 0.09 = 531,000 \] ### Total Interest Carry - **Total Interest Calculation:** \[ \text{Total Interest} = 244,000 + 531,000 = 775,000 \] ### Explanation (Step 2) In this step, we calculated the interest for land and development costs. The land interest is straightforward, while the development costs require calculating the average amount used over the year due to the even distribution of costs. --- ## Final Answers 1. **Anticipated Revenue:** **$16,014,000** 2. **Total Interest Carry (Land plus Hard Costs):** **$775,000**