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Stadium Option to Build Assignment | Homework For You

There is a fault in Real Madrid’s current Stadium. Real Madrid is planning to replace the current Football stadium with a new one.Homework For You

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There are two options

OPTION 1: Build Double Deck Stadium and training pitches. The CAPEX of the first stadium is 1,050,000USD, and the electricity requirement is 1.069MW

OPTION 2: Build Single Deck Stadium and training pitches. The CAPEX of the second stadium is 1,716,000USD, and the electricity requirement is 1.020MW

The OPEX costs of the stadiums are determined by the electricity costs, which is 0.05 $/kWh.

Real Madrid rate of return is 10%/ye and the stadium life is 15 years.

1. Determine the best Stadium option to build

2. What if the electricity prices dropped to 0.10 $/kWH . How would the answer change? Get Economics homework help today

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