Devprop Leasing Co.is an industrial property development company, that typically develops warehouse and industrial complexes in new or underdeveloped areas, operates these complexes as fully fitted with equipment and office furniture for a number of years (never more than 10 years) and having created a thriving complex ultimately sells these complexes for a substantial profit. (Details inrespect to normal investment and operating activities are given below). The corporation purchases its warehouse/industrial complexes from an associated (but separate) construction company at cost (including land and buildings and initial equipment etc).
Details of Discretionary Variables
The initial values of the discretionary are provided in the table on page 20. The following details are further descriptions and parameters that are required for the investment analysis model.
Investment Project Term
Investment projects will be for a minimum of three years and for the sake of this assignment it can be assumed that no investment will exceed 10 years. Each schedule must allow for these parameters. In addition where an investment is for less than 10 years the schedules should be designed in a manner that does not show zero values nor show values (negative or otherwise) in years other than those for which the investment exists
The Expected Life of Investment Project:will be determined by market demographics, economic forecasts, etc. but will always be between three and ten years.
The total cost of complex is made up of the following variables
1. The cost of the Building
2. The cost of Airconditioning Plant