FIN 467 Week 5 Discounted Cash Flow Analysis

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FIN 467 Week 5 Discounted Cash Flow Analysis
FIN 467 Week 5 Discounted Cash Flow Analysis
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FIN 467 Week 5 Discounted Cash Flow Analysis

Using your information from Weeks 3 and 4:

Estimate your 5-year before tax cash flow. See Real Estate Principles: A Value Approach, Exhibit 19-4.

Assume you will sell your property at the end of the Year 5.

Determine your terminal value using a going-out cap rate, then estimate your net sale proceeds. See Real Estate Principles: A Value Approach, Exhitbit 19-3.

Determine an appropriate discount rate and calculate the present value of your total cash flow. See Real Estate Principles: A Value Approach, Exhibit 19-6.

Calculate the Internal Rate of Return. Your purchase price less loan financing is your initial cash outlay in year 0.

Evaluate your investment:

  • Was your investment sucessful?

  • Why or why not?

  • What factors would you change to improve your investment?

Produce a 350- to 525-word paper or 8- to 12-slide presentation using a modality of your choice. Include the following:

  • your investment evaluation based upon your discounted cash flow analysis.

  • copies of all schedules and calculations.

Format your submission consistent with APA guidelines.

Click the Assignment Files tab to submit as a Microsoft® Word document or Microsoft® PowerPoint® presentation.