The Assessment This assessment will allow you to understand and demonstrate the different forms of implicit and explicit valuation methods and how to apply them with Excel. Your Excel work will

Use the provided TVM solver to determine the interest rate on a loan of $5400 if interest is compounded monthly for 72 months and the final amount of the loan is $6965.35. List the values you used for present value, future value, number of years, and number of compounding periods per year.

mework: Financing Project Development and Pass-Throughs As.... i 2 D points eBook Print References Mc Grow Complete this question by entering your answers in the tabs below. OSHIBA Req Al Req A2 Estimate the construction draw schedule, interest carry, and total loan amount for improvements. (Enter your answers in dollars, not in millions. Round your final answers to the nearest whole amount.) Month 0 Month 1 Month 2 Month 3 Month 4 Month 5 Month 6 Month 7 Month B Month 9 Month 10 Month 11 Month 12 Total Type here to search Draws Direct Costs S Req B1 Interest 0 $ Req B2 Total Monthly Draws (a) + (b) 0 $ Req C Payments Principal OS Reg A1 #1 Req D Total Interest (g) x Payments (d) + (6%/12) (0) 0 $ Saved 0 $ Req A2 > < Prex 2 of 4 0 0 $ Ending Balance(g) Previous Balance +(c)- (d) Next > 7z 6/nmework: Financing Project Development and Pass-Throughs As... 2 D woints eBook ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation Prim References Mc Graw Problem 16-3 OSHIBA As a financial advisor for the Spain Development Company, you have been given the construction and marketing studies for the proposed Timbercreek office project. Several potential sites have been selected, but a final decision has not been made. Your manager needs to know how much she can afford to pay for the land and still manage to return 16 percent on the entire project over its lifetime. The strategic plan calls for a construction phase of one year and an operation phase of five years, after which time the property will be sold. The marketing staff says that a 1.3-acre site will be adequate because the initial studies indicate that this site will support an office building with a gross leasable area (GLA) of 26,520 square feet. The gross building area (GBA) will be 31,200 square feet, giving a leasable ratio of 85 percent. The marketing staff further assures you that the space can be rented for $20.3 per square foot. The head of the construction division maintains that all direct costs (excluding interest carry and all loan fees) will be $3.5 million. The First Street Bank will provide the construction loan for the project. The bank will finance all of the construction costs, site nation fee of 1.5 points. The construction division improvements, and interest carry at an annual rate of 6 percent plus a loan estimates that the direct cost draws will be taken down in six equal amounts commencing with the first month after close. The permanent financing for the project will come at the end of the first year from the Reliable Company at an interest rate of 5 percent with a 4 percent prepaid loan fee. The loan has an eight year term and is to be paid back monthly over a 25-year amortization schedule. No financing fees will be included in either loan amount. Spain will fund acquisition of the land with its own equity. Spain expects tenant reimbursements for the project to be $3.90 per square foot and the office building to be 75 percent leased during the first year of operation. After that, vacancies should average about 5 percent of GPI per year. Rents, tenant reimbursement, and operating expenses are expected to increase by 3 percent per year during the lease period. The operating expenses are expected to be $1015 per square foot. The final sales price is based on the NOV in the sixth year of the project (the fifth year of operation) capitalized at 9.5 percent. The project will incur sales expenses of 4 percent. Spain is concerned that it may not be able to afford to pay for the land and still earn 16 percent (before taxes) on its equity (remember that the land acquisition cost must be paid from Spain's equity). To consider project feasibility, Required: #1. Estimate the construction draw schedule, interest carry, and total loan amount for improvements. a2. Determine total project cost (including fees) less financing and the equity neoded to fund improvements. b1. Estimate cash flows from operations. b2. Estimate cash flow from eventual sale. c. After discounting equity cash inflows and outflows, is the NPV positive or negative? d. If the asking price of the land were $390,000, would this project be feasible? Type here to search Saved vo. VID VOID ND VOID V VOID DID ii < Prev 2 of 4 Next > 7z 8 177 Desktop

Assuming that the government intervenes in the housing market by regulating the price of houses/apartments/condominiums, what do you think would be the government’s best option, (a) a price ceiling, or a (b) price floor? Who will benefit more from such option chosen? Would choosing an option better or would it be better to leave the workings of a “free market” to take its course?

Compare the cost of borrowing $4300 for six months (180 days) in the following two scenarios. How much will you save if you take out the bank loan as opposed to the cash advance?

2 10 points eBook Print d Grow during the first year of operation. After that, vacancies should average about 5 percent of GPI per year. Rents, tenant reimbursement, and operating expenses are expected to increase by 3 percent per year during the lease period. The operating expenses are expected to be $10.15 per square foot. The final sales price is based on the NOI in the sixth year of the project (the fifth year of operation) capitalized at 9.5 percent. The project will incur sales expenses of 4 percent. Spain is concerned that it may not be able to afford to pay for the land and still earn 16 percent (before taxes) on its equity (remember that the land acquisition cost must be paid from Spain's equity). To consider project feasibility. Required: a1. Estimate the construction draw schedule, interest carry, and total loan amount for improvements. a2. Determine total project cost (including fees) less financing and the equity needed to fund improvements. b1. Estimate cash flows from operations. b2. Estimate cash flow from eventual sale. c. After discounting equity cash inflows and outflows, is the NPV positive or negative? d. If the asking price of the land were $390,000, would this project be feasible? Complete this question by entering your answers in the tabs below. Type here to search TOSHIBA vo. Req B1 OID Req Al Reg A2 Req C If the asking price of the land were $390,000, would this project be feasible? Would this project be feasible? Reg 82 DI Reg D < Req C Reg D > < Prev 2 of 4 Next > 7z 7z/nmework: Financing Project Development and Pass-Throughs As... 2 D woints eBook ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation Prim References Mc Graw Problem 16-3 OSHIBA As a financial advisor for the Spain Development Company, you have been given the construction and marketing studies for the proposed Timbercreek office project. Several potential sites have been selected, but a final decision has not been made. Your manager needs to know how much she can afford to pay for the land and still manage to return 16 percent on the entire project over its lifetime. The strategic plan calls for a construction phase of one year and an operation phase of five years, after which time the property will be sold. The marketing staff says that a 1.3-acre site will be adequate because the initial studies indicate that this site will support an office building with a gross leasable area (GLA) of 26,520 square feet. The gross building area (GBA) will be 31,200 square feet, giving a leasable ratio of 85 percent. The marketing staff further assures you that the space can be rented for $20.3 per square foot. The head of the construction division maintains that all direct costs (excluding interest carry and all loan fees) will be $3.5 million. The First Street Bank will provide the construction loan for the project. The bank will finance all of the construction costs, site nation fee of 1.5 points. The construction division improvements, and interest carry at an annual rate of 6 percent plus a loan estimates that the direct cost draws will be taken down in six equal amounts commencing with the first month after close. The permanent financing for the project will come at the end of the first year from the Reliable Company at an interest rate of 5 percent with a 4 percent prepaid loan fee. The loan has an eight year term and is to be paid back monthly over a 25-year amortization schedule. No financing fees will be included in either loan amount. Spain will fund acquisition of the land with its own equity. Spain expects tenant reimbursements for the project to be $3.90 per square foot and the office building to be 75 percent leased during the first year of operation. After that, vacancies should average about 5 percent of GPI per year. Rents, tenant reimbursement, and operating expenses are expected to increase by 3 percent per year during the lease period. The operating expenses are expected to be $1015 per square foot. The final sales price is based on the NOV in the sixth year of the project (the fifth year of operation) capitalized at 9.5 percent. The project will incur sales expenses of 4 percent. Spain is concerned that it may not be able to afford to pay for the land and still earn 16 percent (before taxes) on its equity (remember that the land acquisition cost must be paid from Spain's equity). To consider project feasibility, Required: #1. Estimate the construction draw schedule, interest carry, and total loan amount for improvements. a2. Determine total project cost (including fees) less financing and the equity neoded to fund improvements. b1. Estimate cash flows from operations. b2. Estimate cash flow from eventual sale. c. After discounting equity cash inflows and outflows, is the NPV positive or negative? d. If the asking price of the land were $390,000, would this project be feasible? Type here to search Saved vo. VID VOID ND VOID V VOID DID ii < Prev 2 of 4 Next > 7z 8 177 Desktop

bussaint, W X Homework: Financing Project Development and Pass-Throughs As... 2 10 points C ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.ml eBook Print References Homework: Financi: X M Question 2 - Home X Grew TOSHIBA during the first year of operation. After that, vacancies should average about 5 percent of GPI per year. Rents, tenant reimbursement, and operating expenses are expected to increase by 3 percent per year during the lease period. The operating expenses are expected to be $10.15 per square foot. The final sales price is based on the NOI in the sixth year of the project (the fifth year of operation) capitalized at 9.5 percent. The project will incur sales expenses of 4 percent. Spain is concerned that it may not be able to afford to pay for the land and still earn 16 percent (before taxes) on its equity (remember that the land acquisition cost must be paid from Spain's equity). To consider project feasibility. Required: a1. Estimate the construction draw schedule, interest carry, and total loan amount for improvements. a2. Determine total project cost (including fees) less financing and the equity needed to fund improvements. b1. Estimate cash flows from operations. b2. Estimate cash flow from eventual sale. c. After discounting equity cash inflows and outflows, is the NPV positive or negative? d. If the asking price of the land were $390,000, would this project be feasible? Complete this question by entering your answers in the tabs below. Reg A1 Liberty University: X NPV Type here to search Req A2 Req Bl Req B2 After discounting equity cash inflows and outflows, is the NPV positive or negative? Vo PID VOID VOID OIL ID VOID V Reg C < Req B2 Req D Saved Reg D > < Prev FIRST TAKE | NBA's X 2 of 4 Next > G 1772/nmework: Financing Project Development and Pass-Throughs As... 2 D woints eBook ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%252F%252Flms.mheducation Prim References Mc Graw Problem 16-3 OSHIBA As a financial advisor for the Spain Development Company, you have been given the construction and marketing studies for the proposed Timbercreek office project. Several potential sites have been selected, but a final decision has not been made. Your manager needs to know how much she can afford to pay for the land and still manage to return 16 percent on the entire project over its lifetime. The strategic plan calls for a construction phase of one year and an operation phase of five years, after which time the property will be sold. The marketing staff says that a 1.3-acre site will be adequate because the initial studies indicate that this site will support an office building with a gross leasable area (GLA) of 26,520 square feet. The gross building area (GBA) will be 31,200 square feet, giving a leasable ratio of 85 percent. The marketing staff further assures you that the space can be rented for $20.3 per square foot. The head of the construction division maintains that all direct costs (excluding interest carry and all loan fees) will be $3.5 million. The First Street Bank will provide the construction loan for the project. The bank will finance all of the construction costs, site nation fee of 1.5 points. The construction division improvements, and interest carry at an annual rate of 6 percent plus a loan estimates that the direct cost draws will be taken down in six equal amounts commencing with the first month after close. The permanent financing for the project will come at the end of the first year from the Reliable Company at an interest rate of 5 percent with a 4 percent prepaid loan fee. The loan has an eight year term and is to be paid back monthly over a 25-year amortization schedule. No financing fees will be included in either loan amount. Spain will fund acquisition of the land with its own equity. Spain expects tenant reimbursements for the project to be $3.90 per square foot and the office building to be 75 percent leased during the first year of operation. After that, vacancies should average about 5 percent of GPI per year. Rents, tenant reimbursement, and operating expenses are expected to increase by 3 percent per year during the lease period. The operating expenses are expected to be $1015 per square foot. The final sales price is based on the NOV in the sixth year of the project (the fifth year of operation) capitalized at 9.5 percent. The project will incur sales expenses of 4 percent. Spain is concerned that it may not be able to afford to pay for the land and still earn 16 percent (before taxes) on its equity (remember that the land acquisition cost must be paid from Spain's equity). To consider project feasibility, Required: #1. Estimate the construction draw schedule, interest carry, and total loan amount for improvements. a2. Determine total project cost (including fees) less financing and the equity neoded to fund improvements. b1. Estimate cash flows from operations. b2. Estimate cash flow from eventual sale. c. After discounting equity cash inflows and outflows, is the NPV positive or negative? d. If the asking price of the land were $390,000, would this project be feasible? Type here to search Saved vo. VID VOID ND VOID V VOID DID ii < Prev 2 of 4 Next > 7z 8 177 Desktop

Determine the future value of a loan of $1850 at 3.6%, compounded monthly for three years and five years. How much money would you save if you were to pay back the loan in three years rather than five? 

5 1 eBook Print Financing Project Development and Pass-Throughs As..... References Mc Graw Problem 16-1 OSHIBA The Investor-developer would not be comfortable with a 7.8 percent return on cost because the margin for error is too risky. If construction costs are higher or rents are lower than anticipated, the project may not be feasible. The asking price of the project is $10,000,000 and the construction cost per unit is $81,600. The current rent to justify the land acqusition is $1.9 per square foot. The weighted average is 900 square feet per unit. Average vacancy and Operating expenses are 5% and 35% of Gross Revenue respectively. Use the following data to rework the calculations in Concept Box 16.2 in order to assess the feasibility of the project Required: a. Based on the fact that the project appears to have 9,360 square feet of surface area in excess of zoning requirements, the developer could make an argument to the planning department for an additional 10 units, 250 units in total, or 25 units per acre. What is the percentage return on total cost under the revised proposal? Is the revised proposal financially feasible? b. Suppose the developer could build a 240-unit luxury apartment complex with a cost of $119,000 per unit. Given that NOI is 60% of rents. What would such a project have to rent for (per square foot) to make an 8 percent return on total cost? Complete this question by entering your answers in the tabs below. Required A Type here to search Required B Suppose the developer could build a 240-unit luxury apartment complex with a cost of $119000 per unit. Given that NOI is 60% of rents. What would such a project have to rent for (per square foot) to make an 8 percent return on total cost? Note: Do not round intermediate calculations. Round your final answer to nearest whole dollar amount. per month per unit Saved < Required A i E Prev 1 of 4 Next > 8

3 5 points Mc Graw Problem 19-1 ESC Two 15-year maturity mortgage-backed bonds are issued. The first bond has a par value of $10,000 and promises to pay a 11.0 percent annual coupon, while the second is a zero coupon bond that promises to pay $10,000 (par) after 15 years, with interest accruing at 10.5 percent. At issue, bond market investors require a 12.5 percent interest rate on both bonds. Required: a. What is the initial price on each bond? b. Now assume that both bonds promise interest at 11.0 percent, compounded semiannually. What will be the initial price for each bond? F1 c. If market interest rates fall to 100 percent at the end of the fifth year, what will be the value of each bond, assuming annual payments as in (a) (state both as a percentage of par value and actual dollar value)? TOSHIBA Complete this question by entering your answers in the tabs below. Type here to search Required A Required B Required C If market interest rates fall to 10 percent at the end of the fifth year, what will be the value of each bond, assuming annual payments as in (a) (state both as a percentage of par value and actual dollar value)? (Do not round intermediate calculations. Round your final answers to 2 decimal places.) Value of bond in dollars Value of the bond in % of par vo PID VOID ID VOID WOND VA VOID OIL OID F2 F3 0 F4 Answer is complete but not entirely correct. $ →8 Bond 1 10,981.81 109.82 % i F5 9/0 S Bond 2 2,145 48 Q 21.45% F6 ▼ < Prev F7 A 3 of 4 F8 Next > F9 0/9 F10 7z F11 8 F12

ail-To X → C 1 5 points Lu X Homework: REITs and RE Investment Performance Assignment eBook Appraisal ✰ ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A Print References Me Problem 21-1 TOSHIBA You have been presented with the following set of financial statements for National Property Trust, a REIT that is about to make an initial stock offering to the public. This REIT specializes in the acquisition and management of warehouses. Your firm, Blue Street asked to prepare a financial analysis of the REIT. Advisors, is an investment management company that is considering the purchase of National Property Trust shares. You have been National Property Trust Panel A. Operating Statement Summary Net revenue Less: annotate XL Homewo X M Question X M Sign In X Interest expense* Net income (loss) *At 8% interest only. Operating expenses Depreciation and amortization General and administrative expenses Management expense Income from operations Less: vo. DID VOID OID VO Panel B. Balance Sheet Summary Assets Cash Rents receivable Properties @ cost Less: Accumulated depreciation Properties-net Total net assets Short term Mortgage debt* Total Shareholder equityt Type here to search Liabilities Total liabilities and equity "At 8% interest only. 110,000,000 shares outstanding. VOILL $ 119,000,000 Al 47,600,000 41,000,000 7,900,000 4,900,000 17,600,000 6,400,000 $ 11, 200,000 $ 53,400,000 4,400,000 890,000,000 469,000,000 421,000,000 $ 478,800,000 Required: National Property Trust with other REITS. a. Develop a set of financial ratios that will provide Blue Street Advisors with useful information in the evaluation and d comparison of b. Your research also indicates that the shares of comparable REITS specializing in warehouse acquisitions in the same regions are selling at dividend yields in the range of 8 percent. Price multiples for these REITS are about 12 current FFO. What price range does Prev 1 of 7 $ 167,800,000 80,000,000 247,800,000 231,000,000 $ 478,800,000 Saved N Adrian V Next > W 72/nail-To X с 1 Homework: REITs and RE Investment Performance Assignment i 5 points eBook Print Ly Appraisal X References Mc annotateX Homewo X M Question X M Sign In X In x ezto.mheducation.com/ext/map/index.html?_con=con&external_browser=0&launchUrl=https%253A%25 Panel B. Balance Sheet Summary Assets Cash Rents receivable Properties @ cost Less: Accumulated depreciation Properties-net Total net assets Liabilities Short term Mortgage debt* Total Shareholder equityt Total liabilities and equity *At 8% interest only. †10,000,000 shares outstanding. TOSHIBA Required A Required B Type here to search MAGANDA Required: National Property Trust with other REITs. a. Develop a set of financial ratios that will provide Blue Street Advisors with useful information in the evaluation and comparison of b. Your research also indicates that the shares of comparable REITs specializing in warehouse acquisitions in the same regions are this suggest for National shares? selling at dividend yields in the range of 8 percent. Price multiples for these REITs are about 12 current FFO. What price range does properties owned by Blue Street Advisors? c. What is the NAV for National Property Trust assuming that a blended capitalization rate of 10 percent would be applicable for the Complete this question by entering your answers in the tabs below. Required C $ 53,400,000 4,400,000 890,000,000 469,000,000 421,000,000 $ 478,800,000 $ 167,800,000 80,000,000 < Required A 247,800,000 231,000,000 $ 478,800,000. Your research also indicates that the shares of comparable REITS specializing in warehouse acquisitions in the same regions are selling at dividend yields in the range of 8 percent. Price multiples for these REITS are about 12 current FFO. What price range does this suggest for National shares? (Round your intermediate calculations and final answers to 2 decimal places.) Price range from Required C > B Saved Prov J 1 of 7 P Adrian X Next > W 7z