For this week’s case analysis, you will complete practice problems that apply the formulas and calculations for IRR, NPV, financial ratios, sensitivity analysis, scenario analysis, and probability distributions. Complete the following problems found in your etext:
- Chapter 11: Problem 2
- Chapter 13: Problem 3
- Chapter 14: Problems 1 & 2
You must show all work for each problem. Your case analysis must conform to the assignment expectations and is due by 11:59 pm CT on Sunday.
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BUSI520Week5CaseAnalysisTemplate1.xlsx
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Sheet1
| BUSI 520 WEEK 5 CASE ANALYSIS | ||||||||||
| CHAPTER 11 PROBLEM 2 | ||||||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | |||||
| Purchase Price | ||||||||||
| NOI | ||||||||||
| Rental Income | ||||||||||
| Vacancies & Collections | ||||||||||
| Effective Gross Income | ||||||||||
| Operating Expenses | ||||||||||
| NOI | ||||||||||
| Debt Service | ||||||||||
| Before Tax Cash Flow | ||||||||||
| Annual Debt Service | ||||||||||
| Loan Amount | ||||||||||
| Mortgage Balance | ||||||||||
| Debt Coverage Ratio | ||||||||||
| Terminal Cap rate | Yr5NOI/Resale $ | |||||||||
| BTIRR | ||||||||||
| Sales Price | ||||||||||
| Mortgage Balance Yr 5 | ||||||||||
| BT Cash Flow | ||||||||||
| Chapter 13 Problem 3 | ||||||||||
| Year 0 | Year 1 | Year 2 | Year 3 | Year 4 | Year 5 | Resale value | Probability | |||
| Pessimistic | NOI | |||||||||
| Most Likely | NOI | |||||||||
| Optimistic | NOI | |||||||||
| Pessimistic | IRR | |||||||||
| Most Likely | IRR | |||||||||
| Optimistic | IRR | |||||||||
| Pessimistic | EIRR | |||||||||
| Most Likely | EIRR | |||||||||
| Optimistic | EIRR | |||||||||
| Overall Exp IRR | ||||||||||
| Pessimistic | Deviation | |||||||||
| Most Likely | Deviation | |||||||||
| Optimistic | Deviation | |||||||||
| Pessimistic | Sq Dev | |||||||||
| Most Likely | Sq Dev | |||||||||
| Optimistic | Sq Dev | |||||||||
| Pessimistic | Product | |||||||||
| Most likely | Product | |||||||||
| Optimistic | Product | |||||||||
| Variance | ||||||||||
| Standard Deviation | ||||||||||
| An investor may prefer a lower IRR and than a larger variance | ||||||||||
| CHAPTER 14, PROBLEM 1 | ||||||||||
| Sales Price | ||||||||||
| Mortgage Balance | ||||||||||
| Cap Gains Tax | ||||||||||
| ATCF | ||||||||||
| Additional ATCF | ||||||||||
| Irr 15% | ||||||||||
| Marginal ROR | ||||||||||
| CHAPTER 14, PROBLEM 2 | ||||||||||
| ATCF from renovation | ||||||||||
| ATCF if not renovated | ||||||||||
| Sales Price Renovated | ||||||||||
| Sales Price if not renovated | ||||||||||
| Additional cash flow | ||||||||||
| Renovation | ||||||||||
| Return on Renovation | ||||||||||
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