DCF Model

a. Using the DCF model, vary the inflation factors for revenues and expenses on an annual basis. What effects do these variations have on the before-tax cash flow?

b. Increase the loan amount 5%. What is the effect on the IRR?

c. Reduce the land costs through the use of grants. List the grants that you use and compare the IRR before and after the reduction of land costs.

d. If you choose to sell the property in year2 rather than year 5, what is the effect on the IRR? LO.1