Question

Alternative A requires a $ 505k build today. Alternative B requires a $ 350k build today and a $ 190k second stage in the future. At an interest rate of 2% per annum, calculate within how many years the second stage of construction of alternative B must occur for the 2 alternatives to be equally desirable (breakeven point). (eye: remember to use the% sign to enter the interest rate based on excel)

With the spreadsheet send screen shot of Excel work or list of data entered to the function.

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Answer 1

The demands on the residential construction sector are substantial. At a time when we are facing a skills shortage, we have increasing workloads and aspirations to deliver ambitious infrastructure projects and targets alongside other modernisation goals such as improving productivity. A key issue at play, beyond planning and developers’ business planning, is industry capacity. In his 2016 report about the construction industry, Modernise or Die, Mark Farmer identified a skills crisis in mainstream construction, likely to result in a decrease of 20-25% in the workforce over the next decade. The workforce is ageing, and the rate of new entrants is lagging behind those leaving. This is likely to be exacerbated by Brexit, as one in eight UK construction workers are foreign, rising to around one in four in London. In addition, the weakening pound has increased the cost of imported materials, with some 20% of bricks and brickmaking components imported, mostly from the EU. Recognising some of these problems, on 5th July 2018 the Government and the Construction Leadership Council published the Construction Sector Deal, allocating £420m in support of industry transformation.

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