Home Improvement Project Exercise Work in groups The Table lists recently sold h

Question

Home Improvement Project Exercise Work in groups The Table lists recently sold houses in the neighborhood. The selling prices and improvements the house had at the time of improvements are shown. For example the first house sold for $181,000 and had a new kitchen, wood floors and new paint. Assume that, other than the five improvements, your house is very similar to the houses listed in Table 1 (sqft, land area, # of bedrooms, # of bathrooms, etc.) and assume all improvements are of the same quality Which one of the five home improvements will be the most profitable for you to build? New Bathroom Kitchen Wood Floors New Costs Price Pool New Paint $181,000 $213,000 $176,000 $169,000 $191,000 $187,000 $199,000 $201,000 $200,000 athroom 10,000.00 15,000.00 30,000.00 $ 5,000.00 S 1,000.00 Kitchen Floors Paint

Explanation / Answer

Comparing 2nd and 9rd, New bathroom increases selling price by (213000-201000) =12000 and costs 10000. Profit = 2000

Wood floors increases sellng price by 1000 and costs 1000 ( 9th and 10th comparison). Hence, 0 profit

New paint also does not do any good.

Most profitable addition is the new bathroom.

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