development costs showing units costs per gross B u s i n e s s F i n a n c e
I have attached the full assignment here is a intro
Prepare a detailed Excel-based Pro Forma for presentation to the investment committee (your instructor). If you intend to submit in an alternate spreadsheet format, please notify me in advance. Format neatly like it would be for a report. Proforma must show:
- All assumptions
- Prepare a timeline
- Prepare a statement of all development costs showing units costs per gross and rentablesquare foot.
- Prepare an income, expense, and cash flow statement for each year of the developmentand holding period. The statement will include before and after-tax calculations.
- Provide an amortization schedule for the permanent loan (preferably on a separate tab).
- Provide a summary of the sale disposition calculations on a before and after-tax basis.
- Provide annual return on equity calculations on a before and after-tax basis. Use both actualcash equity and imputed equity (this equity is the difference between the appraised value derived for the permanent loan and the permanent mortgage). Note also that the equity after the permanent loan may be different that the initial investment so in the 2023 you need to show the cash flows that result from paying off the construction loan and taking out the permanent loan).
- Provide a summary of the quality of the investment using investment below:
1. Calculate before-tax IRR. What does it mean? Relate it to your required return below. 2. Run a table with before-tax NPV (real estate definition) with returns of 8% to 18% at 1%intervals. What, if any, significance is the fact at NPV may be negative? What does NPVtell you?
3. Calculate after-tax IRR. What does it mean?
4. Run a table with after-tax NPV (real estate definition) with returns of 5% to 15% at 1%intervals. What, if any, significance is the fact at NPV may be negative? What does NPVtell you?
5. Calculate the before-tax NPV at 15%. What does the result tell you about theinvestment?
6. If your minimum before-tax cash-on-cash return on equity is 10%, how is thisinvestment?
7. What is the before-tax, partitioned IRR?
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