Concordia Real Estate Inc.: Analysis of the Investment Opportunity

Descriptions: Carrying Amount of PPE is $163,982, 000, which is made up of the figure of plant &equipment which is $106,560,000 add to the Leasehold improvements which is $57,422,000 come out as the total Plant & Equipment Figure. To be expected that the plant and equipment accounts for more than 50% of total PPE ($106,560,000) for their main operating activity — retailing of home consumer products from stand alone destination sites and shopping

Evaluating the risks, calculating the probability of success, and factoring in the projected profit from sales will provide a clearer NPV to be compared with other projects in the

Cruickshank, Garth& Romano is a startup company, formed by Richard, Chris and Wayne to provide industrial, residential and commercial evaluations, and also consulting services and feasibility analyses in National Capital Region (NCR). Based on the experienced principals who enjoy good reputations, Cruickshank, Garth& Romano is aimed at providing high quality service as NCR’s top four firms which dominate the commercial appraisal market in NCR, but they tend to do business with the owners of smaller properties. Recently, because of the economic regression, to get sufficient revenue, the principals have realized that getting new larger developers is crucial to

1. The first step to evaluating the cash flows is to conduct the depreciation tax flow analysis. Depreciation is not a cash flow, but the depreciation expense lows the taxes payable for the company. As a result, the tax effect of deprecation needs to be calculated as a cash flow. There are two depreciable items on the company's balance sheet the building and the equipment. The equipment is known to have a seven year depreciable life, which will be assumed to be straight line. The building is also assumed to be subject to straight line depreciation, this time of forty years. The tax saving reflects the depreciation expense multiplied by the tax rate, which in this case is assumed to be 28%. The following table illustrates the tax effect in future dollars of the depreciation expense:

c. Depreciation is computed using the straight-line method over the asset’s estimated useful life, which is determined by asset category as follows: Buildings and improvements (5 – 40 years); Store fixtures and equipment (3 – 15years), Leasehold improvements (Shorter of initial lease term or asset life); Capitalized software (3 – 7 years).

Grappling with the potential purchase of Olive Hill Farm, we decided to conduct a financial analysis to determine whether the project should be taken or not. Our financial analysis include scenarios for the best, worse, and most likely outcomes of purchasing the farm. For each scenario a Net Present Worth (NPW) and an Internal Rate of Return (IRR) was calculated and compared. This revealed that there was little gain for the worst case scenario and large gains for the other two scenarios. A sensitivity analysis and a break-even analysis was also conducted. The sensitivity analysis identified the most influential factors on the NPW. In the end, the analysis favored buying Olive Hill Farm because it would be a low risk, high reward investment.

Table 7 in the detailed analysis above shows the summary of the Discounted Cash Flow analysis performed for each of the four potential properties considered for investment. From the chart below, we observe that of the four properties, TFB has the maximum increase in reversion value at the end of the holding period, i.e. 10years. On a primarily income generation potential basis, Alison Green, with a Net Present value of the future rents at $734.29 looks attractive among the four options. Looking at the Investment ranks of the four properties with Simple returns and Discounted returns variables, Alison

1.3 The example provided is a proposed new hotel located in Glencoe, Highlands. The client is Mr. Smith and the executing architects are R&M from Edinburgh. The Bill of Quantities has already been prepared and the price

Angus Cartwright III, an investment advisor, was asked to provide investment advisory services for two clients, John DeRight and Judy DeRight. They both wanted to purchase a property that (1) is large enough to attract the interest of a professional real estate management company and (2) has a minimum leveraged return on their investments of 12% after

Mr. Alexander is a gentleman that is looking to build his investment portfolio through residential real estate. He is looking at investing in a 4-plex in a historical district located within Boston, Massachusetts. The building is located on Revere Street and has a listing price of $350,000. Mr. Alexander is evaluating the possible commitment to understand what he stands to gain from the annual cash flows while at the same time understanding the risks involved. The subject property is located within a historical district and is not yet capable of housing tenants. Property will require significant improvements prior to inhabitation. Client

After analysis of Mr. Alexander’s proposal, it is obvious why he should take advantage of a real estate investment opportunity. The experience he would gain coupled with the added income would establish a solid foundation for making more investments in the future. To this end, however, I find Alexander’s plan for the Revere Street property falls short. A major deficiency is that his projections are almost entirely predicated on estimates and assumptions that are neither conservative nor reliable. In a similar vein, Alexander’s “DIY” approach is not only exemplar of naiveté, but also suggestive of many implications that were overlooked in his proposal. And, even more discouraging, a best-case scenario analysis reveals that even without

Given certain indicators of slow market growth and the high purchase price being advertised by the seller, this is most likely a bad investment for Laflin and his investors. While employment growth may be on the rise, the lack of speculative construction is troubling as this implies the market is not expecting an increased demand. In any case, when considering the expiration of the current tenants’ above market rents and the unfortunately low current market rents, Laflin would still need a great deal of growth in addition to a lower negotiated price to make this investment profitable.

In the attached file, there are calculations of relevant cash flows and their different impacts on the expansion analysis. The capital expenditure of the first year comes out to be about $43,500 which is financed via a 6% loan with monthly payments. Amortization of $9,300 per year will be charged to depreciate the capital expenditure which yields a tax shield (20% tax) of $1,860 annually. The per month interest payment comes out to be $1,927.95 and the entire loan will be paid off in two years. As a result, the annual interest tax

As part of the business and finance module, I am require to write a report, discussing how depreciation impacts a firm in the construction industry. Within this report I will discuss different areas of depreciation such as what is depreciation? , causes of depreciation, its importance in the construction industry, how depreciation affects profits and how depreciation can be measured. I will also discuss the different methods for calculating depreciation and the effects on accounts if depreciation is not accounted for. In this report, I will be giving examples of fixed assets that are common to the construction industry and also give examples of how depreciation is calculated.

1. Introduction 2. Analysis of current position 3. Analysis of new project 3.1 Methodologies and processes of Valuation 3.2 processes of Valuation 4. Conclusion