ECO Assignment – Melon Enterprise / hwaid.com
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Melon Enterprise is a commercial real estate developer. You recently joined Melon and your position reports directly to Pat Smith, the CEO. When you meet Pat for the first time, she asks you to work on a project that has to be completed in about a week.
Pat tells you that Melon is thinking about leasing a parcel of land to build a shopping center.
Melon would own and operate the shopping center and generate revenue by renting space to
retailers. Pat would like you to do some work on the project. Specifically, she would like you to
complete the following tasks:
1. Determine the optimal size of the shopping center (to the nearest 100 square meters)
based on existing estimates of the demand for retail space.
2. Determine the most Melon should be willing to pay to lease the land for the expected life of
3. Calculate the profit under each possible demand curve with the optimum size of the shopping
4. Determine if it is worth hiring a local consultant, Roland Thomas, to do some additional market
research that would provide a better estimate of the demand for retail space.
5. Write a short report summarizing the results of your analysis and any recommendations.
Pat also informs you that Bob Devine, a former Melon employee, did some preliminary work on the
project, but left the organization before wrapping things up. Pat says that you should have
complete confidence in any work Bob did on the project and that you should use his findings and
assumptions as a starting point for your analysis. In fact, Pat has reviewed Bob’s notes and quickly
summarizes the key information she thinks you’ll need for your analysis.
Specifically, she tells you that:
•Bob thought the shopping center would take one year to build and would last 20 years. He
estimated that it would cost $100 per square meter to build...