Calculate total cost of the development

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Reference no: EM132135142 , Length: word count:4000

PROJECT INVESTMENT ANALYSIS ASSIGNMENT -

The aim of this project is to introduce participants to concepts of Financial Feasibility Modelling and the use of spreadsheets for feasibility exercises.

Assume that you have been appointed as a financial consultant by an investment company to carry out a financial feasibility study for the proposed Office Development Complex Project.

Prepare a report with your recommendations to the Director of the Investment Company to justify the financial viability of this proposed development.

THE ANALYSIS

Part "A" -

1. Calculate total cost of the Development at 1st July 2018 value.

2. Preparing a development plan (including the sale of the apartments) by assuming that demolition; land development and design and construction will start on 1st October 2018.

3. Prepare a cash flow schedule starting on 1st July 2018.

4. Estimate the net income on completion of project, 1st July 2021

5. Calculate:

- Total development cost
- Project finance cost
- Cost escalation.

6. Calculate the initial project development yield on completion of the project.

Part "B" -

Assuming the entire facility will be sold to John Wiley Pty Ltd. on completion (2021) at a price that will be 5% yield to John Wiley Pty Ltd. on the first year of ownership 2021. Calculate for John Wiley Pty Ltd.

1. The Price at which John Wiley Pty Ltd. will purchase the entire facility.

2. The original developer's profit/loss.

3. Generate an Annual Net Cash Flow for John Wiley Pty Ltd. for 10 years.

4. Net Present Value of the John Wiley Pty Ltd.'s cash flow using 9% discount rate (Base year 2021).

5. Assuming John Wiley Pty Ltd. sell the Facility for $900 million at the end of 10th year of ownership (year 2031), calculate the Net Present Value of sale. (Base year 2021). Discount rate is 9%.

6. Calculate the Profit & IRR John Wiley Pty Ltd. will make at 2021 value.

Part "C"
Assess the impact of changing the debt: equity ratio to 80: 20 and 50: 50.

Part "D"

1. List all possible risks which may have an influence on this development proposal.

2. Identify three (3) key risk areas that need further evaluation from the above list.

3. Carry out sensitivity/risk analysis on the above three key areas which may have greater concern on the project development.

Part "E"

List all assumptions at the front of your report.

RECOMMENDED REPORT STRUCTURE -

• Cover
• Checklist
• Letter to the Managing Director
• List of Contents
• Executive Summary - Outline range of Recommendations
• Brief outline of the project
• List of Assumptions
• Methodology
• Spreadsheet Computations & Graphs/Charts.
• Risk and Sensitivity Analysis
• Discussion and Recommendations
• References.
• Electronic files Submission - Saved in a USB with file names
• Any other relevant information.
• Copy of the assignment brief.

Attachment:- Assignment Files.rar

Reference no: EM132135142

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Reviews

len2135142

10/8/2018 10:23:25 PM

Word count – 4000. Sending you the assignment structure, brief and marking rubric as well so that you can understand my assignment .I am also attaching a sample as well along with it ,this sample was an earlier submission of a student who finished his course investment analysis and normally the concept and the assignment brief doesn't change so please refer the sample.

len2135142

10/8/2018 10:23:18 PM

I have a quick submission to do but i am not sure when would you be able to finish it. If you will look through the file that i have sent you will notice that i have sent you a clicked picture which says step 1 till step 4 .This calculation values were given to us by the lecturer to use it in the assignment. Please note that the assignment will be later reviewed by the client and we will be asked questions on how we generated the assumptory value and i need an explanation on the side to explain how you generated each value as well. I would actually use the given material you provide to study for the exams as well.

len2135142

10/8/2018 10:23:11 PM

The final report due date is Week 10 – hand your assignment to your facilitator at the beginning of the class. After the submission you will be called for an interview to discuss your findings. This interview will be held within two weeks of your report submission. It is your responsibility to organise a time for an interview. If you fail to attend the interview, then the report will not be assessed and no marks will be given for this assignment.

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