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We decided that we want to: buy a , real estate, asset ( . . . we talked about an apartment ) of $ 1
We decided that we want to:
buy a real estate, asset we talked about an apartment of $ mil
hold that real estate asset for years
sell that real estate asset in years, and we expect to receive $we did diligent market research....
we could rent the real estate asset ie apartment for $ annually in first year
the rent is increasing, in line with inflation, by per year.
in year we install some marble counters, which cost us $
in year we have to paint and renovate the apartment and that costs us $
we decided, and discussed in class, that the discount rate we will use is
Based on your analysis, is this a good deal? Why?
Support your response with see slides:
Based on your analysis, is this a good deal? Why?
Support your response with see slides:
payback analysis
IRR analysis and
NPV analysis
Try to use MS Excel functions PV FV NPV and IRR in your spreadsheet.
For marks above Good detail your opinion about the discount rate use ie its logic, rationale etc.
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