The document presents an economic feasibility study for three residential development alternatives in Montreal: 1) Retrofitting and selling an existing property, 2) Constructing and selling a new 4-storey building, and 3) Constructing and then selling and renting units in a new 4-storey building. It describes the proposed properties, provides cost and income projections for each alternative, lists key assumptions, and presents analyses of cash flows, returns, and risks for evaluating and comparing the alternatives.

1. Economic Feasibility
Study
INVESTMENT EVALUATION PROCEDURE FOR A
CASE STUDY WITH THREE ALTERNATIVES
Presented By:
Hossein Khoodaverdipoursarbandi 40003814
Adel Khoieiniha 40003181
Sadaf Khoshgoftar 27737882
Mohammadreza Moshayedi 40019305
Roham Narenjiha 27819811
Presented to:
Dr. Budawara
BLDG 6561
MARCH 31th, 2016

2. Outline
1. Introduction
2. Project Description
3. Project Costs
4. Project Income
5. Assumptions
6. Analysis of Alternatives
7. Comparison of Alternatives
8. Sensitivity Analysis
9. Break Even Analysis
10. Risk Analysis
2

3. Introduction
A feasibility study is conducted for an investor interested in the real
estate development in Montreal market:
3
 Retrofit and sale of a residential property
 Construction and sale of a 4 storey residential property
 Construction and sale & Rental of a 4 storey residential
property
Introduction Project
Description
Project Costs
Project
Income
Assumptions Analysis

4. Project Description
Residential property in lake shore area in Montreal, Quebec.
– Location: H9S4H4 63 point Clair lake shore ,Montreal
– Type: 2 story slab, structural masonry warehouse.
– Size: 9573 sq. ft.
– Length: 174 sq.ft.
– Widgh: 55 sq.ft.
– Age of building 1937
4
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis

5. Project Description
5
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis
Zoning Overview
5
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis
Near highway 20
Near lake shore

6. Project Description (Retrofit)
6
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis
Existing building
Ground 1,299
square
feet
1st floor 484
square
feet
total 1,783
square
feet

7. Project Description(4 Storey Building)
7
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis

8. Project Description
8
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis

9. Project Description
9
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis

10. Project Description
Percent Utilization of Building Space
10
Resource: Quebec Building Code
Introduction Project Description Project Costs
Project
Income
Assumptions Analysis
Storey % of
Utilization
Net Area (sq. ft.) Livable
Area
Ground 36% 3,233 1466
1st floor 39% 3,487 3187
2nd floor 39% 3,487 3187
3rd floor 39% 3,487 3187
Total Area 15,477 11027

11. Project Costs
Land cost: $ 200,000
Building Cost: $326,016 tax included
Construction cost:
Marketing cost:
11
Introduction
Project
Description Project Costs Project
Income
Assumptions Analysis
Retrofit Residential Building $ 86,351 48.43$/SF
Construction Residential Building $ 1,488,645 135$/SF
Alternative 1 - Retrofit. + sale 4.0%
Alternative 2 - Res + sale 4.0%
Alternative 3 - Res + sale & rent 1.5% & 4.0%

12. Project Income
12
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Income Schedule of Residential Sale Units
Floor
Total Gross
Area of Land
Percentage of Livable
Area
Total Net Area Price per square feet Total Amount
ft2
% ft2
$ / ft2
$
Ground 9,573 36% 1466 263.6 $386,394.73
1st floor 9,573 39% 3187 263.6 $840,000.00
2nd floor 9,573 39% 3187 263.6 $840,000.00
3rd floor 9,573 39% 3187 263.6 $840,000.00
Total $2,906,394.73
Income Schedule of Retrofit Sale Units
Floor
Total Gross
Area of Land
Percentage of
Livable Area
Total Net
Area
welcome,school
and municial tax
Unit Price
Total
Amount
ft2
% ft2
$ / Unit $
House 9,573 19% 1,783 -5984 272 $478,992

13. Project Income
13
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Income Schedule of Residential Rental Units
Floor
Total Gross
Area of Land
Percentage of rentable
Area
Total Net Area
Price per square feet
per month
Total Amount
ft2
% ft2
$ / ft2
$
Ground 9573 36% 1466 $1.32 $1,931.97
1st floor 9573 39% 3187 $1.32 $4,200.00
2nd floor 9573 39% 3187 $1.32 $4,200.00
3rd floor 9573 39% 3187 $1.32 $4,200.00
Total $14,531.97

14. Assumptions
14
MARR:
WACC = Debt Cost + Equity Cost
Debt Cost = %Debt * %Debt Interest Rate * [1-Tax Rate]
Equity Cost = %Equity * Factors,
Factors = Risk Free Rate + Beta*[Risk Market Rate – Risk Free Rate]
MARR = WACC + Profit Percentage
Introduction Project
Description
Project Costs Project Income Assumptions Analysis

15. Assumptions
15
Risk free rate (Rf) used for 41 countries in 2015
Market risk premium (MRP) used for 41 countries in 2015
Introduction Project
Description
Project Costs Project Income Assumptions Analysis

16. Assumptions
16
 Inflation Rate (Bank of Canada): 1.61%.
 Construction Duration : 1 year Retrofit & 2 years Residential Building
 Study Horizon : 30 years
 Property Tax (City of Montreal):
 property tax 0.9177% annually
 Depreciation (Canada Revenue Agency (CRA) ): 4%
 Appreciation (Canadian real state association): 2.5%
 Income tax rate (Federal & Government of Quebec): 26.9%
Introduction Project
Description
Project Costs Project Income Assumptions Analysis

17. Loan
17
Introduction Project
Description
Project Costs Project Income Assumptions Analysis
Retrofit Existing Building
Description Loan Interest Type of loan $ Amount
Total Taken
Loan
House price ( we take a
loan of 70% house price)
2.9%
Buying a house with 30%
Down Payment
$326,016 $228,211
Using Line of credit for
30% rest of house price
3.5%
Line of Credit for all other
possible costs
$97,805
$201,393
the whole Renovation
cost
$86,351
The whole interest of line
of credit
$5,838
loan payment of house $11,400
4 storey Residential Building
Borrowing details Total loan we take the loan in 3 parts ,in first year
Total bank loan ( 80% of the
total amount of construction
cost and house price)
$1,451,729 $483,909.60 $483,909.60 $483,909.60
Interest 8% $38,712.77 $25,808.51 $12,904.26

18. Analysis of Alternatives
18
Analysis of Alternative 1: Retrofit and sale of House
 Cost of House : $326,016 tax included
 Cost to construction: $86,351
 Amount of money loaned: $429,605
 Constructor will not invest anything and the whole cost will be provided by loan
 Assumption is to find the house the same as first price and do this project for 30 years, hence, we will repeat
this project 30 times
 Marketing cost: 4.0% of sale of the units
 Operations and maintenance costs are the responsibility of the buyer
 Income for sale of units: $478,992
 Before-tax MARR: 10%
 After-tax MARR: 7.6%
 Income tax rate: 26.90%
 Depreciation and appreciation not considered for this alternative
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis

19. Analysis of Alternatives
19
Analysis of Alternative 1: Before Tax Cash Flow
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
($350,000.00)
($250,000.00)
($150,000.00)
($50,000.00)
$50,000.00
$150,000.00
$250,000.00
$350,000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EOY
Renovated Residential Selling BTCF

20. 20
Analysis of Alternative 1: After Tax Cash Flow
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
($450,000.00)
($350,000.00)
($250,000.00)
($150,000.00)
($50,000.00)
$50,000.00
$150,000.00
$250,000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EOY
Renovated Residential Selling ATCF With Inflation

21. 21
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Selling Renovated Residential Properties in the first year
ATCF-Plan #1
EOY BTCF (0%) BTCF (1.61%)
LCF
Taxable Income Income Tax ATCF (0%) ATCF (1,61%)
Interest Principal
0 ($326,016.00) ($326,016.00) ($429,604.69) ($429,604.69) ($429,604.69)
1 $373,481.92 $379,494.98 $12,298.48 $4,939.52 $367,196.50 $98,775.86 $262,407.58 $268,420.64
2 $47,465.92 $48,230.12 $12,298.48 $4,939.52 $35,931.64 $9,665.61 $25,501.83 $26,266.03
3 $47,465.92 $49,006.63 $12,298.48 $4,939.52 $36,708.15 $9,874.49 $25,292.95 $26,833.66
4 $47,465.92 $49,795.63 $12,298.48 $4,939.52 $37,497.15 $10,086.73 $25,080.71 $27,410.42
5 $47,465.92 $50,597.34 $12,298.48 $4,939.52 $38,298.86 $10,302.39 $24,865.05 $27,996.47
6 $47,465.92 $51,411.96 $12,298.48 $4,939.52 $39,113.48 $10,521.53 $24,645.91 $28,591.95
7 $47,465.92 $52,239.69 $12,298.48 $4,939.52 $39,941.21 $10,744.19 $24,423.25 $29,197.03
8 $47,465.92 $53,080.75 $12,298.48 $4,939.52 $40,782.27 $10,970.43 $24,197.01 $29,811.84
9 $47,465.92 $53,935.35 $12,298.48 $4,939.52 $41,636.87 $11,200.32 $23,967.12 $30,436.55
10 $47,465.92 $54,803.71 $12,298.48 $4,939.52 $42,505.23 $11,433.91 $23,733.53 $31,071.32
11 $47,465.92 $55,686.05 $12,298.48 $4,939.52 $43,387.57 $11,671.26 $23,496.18 $31,716.31
12 $47,465.92 $56,582.60 $12,298.48 $4,939.52 $44,284.12 $11,912.43 $23,255.01 $32,371.69
13 $47,465.92 $57,493.58 $12,298.48 $4,939.52 $45,195.10 $12,157.48 $23,009.96 $33,037.62
14 $47,465.92 $58,419.22 $12,298.48 $4,939.52 $46,120.74 $12,406.48 $22,760.96 $33,714.26
15 $47,465.92 $59,359.77 $12,298.48 $4,939.52 $47,061.29 $12,659.49 $22,507.95 $34,401.80
16 $47,465.92 $60,315.46 $12,298.48 $4,939.52 $48,016.98 $12,916.57 $22,250.87 $35,100.42
17 $47,465.92 $61,286.54 $12,298.48 $4,939.52 $48,988.06 $13,177.79 $21,989.65 $35,810.27
18 $47,465.92 $62,273.26 $12,298.48 $4,939.52 $49,974.78 $13,443.21 $21,724.23 $36,531.56
19 $47,465.92 $63,275.86 $12,298.48 $4,939.52 $50,977.38 $13,712.91 $21,454.53 $37,264.46
20 $47,465.92 $64,294.60 $12,298.48 $4,939.52 $51,996.12 $13,986.96 $21,180.48 $38,009.16
21 $47,465.92 $65,329.74 $12,298.48 $4,939.52 $53,031.26 $14,265.41 $20,902.03 $38,765.85
22 $47,465.92 $66,381.55 $12,298.48 $4,939.52 $54,083.07 $14,548.35 $20,619.09 $39,534.72
23 $47,465.92 $67,450.29 $12,298.48 $4,939.52 $55,151.81 $14,835.84 $20,331.60 $40,315.97
24 $47,465.92 $68,536.24 $12,298.48 $4,939.52 $56,237.76 $15,127.96 $20,039.48 $41,109.80
25 $47,465.92 $69,639.68 $12,298.48 $4,939.52 $57,341.20 $15,424.78 $19,742.66 $41,916.41
26 $47,465.92 $70,760.87 $12,298.48 $4,939.52 $58,462.39 $15,726.38 $19,441.06 $42,736.01
27 $47,465.92 $71,900.12 $12,298.48 $4,939.52 $59,601.64 $16,032.84 $19,134.60 $43,568.80
28 $47,465.92 $73,057.72 $12,298.48 $4,939.52 $60,759.24 $16,344.23 $18,823.21 $44,415.00
29 $47,465.92 $74,233.95 $12,298.48 $4,939.52 $61,935.47 $16,660.64 $18,506.80 $45,274.83
30 $47,465.92 $75,429.11 $12,298.48 $4,939.52 $63,130.63 $16,982.14 $18,185.30 $46,148.49
Present Worth (PW) $65,473 $166,176
Future Worth (FW) $589,431 $1,496,015
Annual Worth (AW) $5,598 $14,208
IRR 10.54% 13.5%

22. Analysis of Alternatives
22
Analysis of Alternative 2: construction and Sale of 4 Storey Residential Building
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
 Cost of House : $326,016 tax included
 Cost to construction: $1,488,645
 Amount of money loaned: $1,451,728
 Constructor will not invest anything and the whole cost will be provided by loan
 Assumption is to find the house the same as first price and do this project for 30 years, therefore, we will repeat
this project 15 times
 Marketing cost: 4.0% of sale of the units
 Operations and maintenance costs are the responsibility of the buyer
 Income for sale of units: $2,906,394 (70% of units= 5 apart, will be sold in first year in order to pay half of loans
and provide the construction cost and the rest of units=2 apart will be sold at the end of second year)
 Before-tax MARR: 10%
 After-tax MARR: 7.6%
 Income tax rate: 26.90%
 Depreciation and appreciation not considered for this alternative

23. 23
Analysis of Alternative 2: Before Tax Cash Flow
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
($400,000.00)
($200,000.00)
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EOY
4 Story Residential Selling BTCF

24. 24
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Analysis of Alternative 2: After Tax Cash Flow
Selling 4 story Residential Properties in 2 years and put the Money in the Bank for the rest
ATCF-Plan #1
EOY BTCF (0%) BTCF (1.61%)
LCF
Taxable Income Income Tax ATCF (0%) ATCF (1.61%)
Interest Principal
0 ($326,016.00) ($326,016.00) ($1,451,728.80) ($1,451,728.80) ($1,451,728.80)
1 $765,357.53 $777,679.79 $77,425.54 $725,864.40 $700,254.25 $188,368.39 $499,563.60 $511,885.86
2 $340,826.68 $346,313.99 $58,069.15 $725,864.40 $288,244.84 $77,537.86 $205,219.67 $210,706.98
3 $439,341.53 $453,602.21 $77,425.54 $725,864.40 $376,176.67 $101,191.53 $260,724.47 $274,985.15
4 $340,826.68 $357,555.07 $58,069.15 $725,864.40 $299,485.92 $80,561.71 $202,195.82 $218,924.21
5 $439,341.53 $468,325.78 $77,425.54 $725,864.40 $390,900.24 $105,152.17 $256,763.83 $285,748.08
6 $340,826.68 $369,161.03 $58,069.15 $725,864.40 $311,091.87 $83,683.71 $199,073.82 $227,408.16
7 $439,341.53 $483,527.27 $77,425.54 $725,864.40 $406,101.73 $109,241.37 $252,674.63 $296,860.36
8 $340,826.68 $381,143.70 $58,069.15 $725,864.40 $323,074.55 $86,907.05 $195,850.48 $236,167.49
9 $439,341.53 $499,222.18 $77,425.54 $725,864.40 $421,796.64 $113,463.30 $248,452.70 $308,333.35
10 $340,826.68 $393,515.32 $58,069.15 $725,864.40 $335,446.17 $90,235.02 $192,522.51 $245,211.15
11 $439,341.53 $515,426.54 $77,425.54 $725,864.40 $438,001.00 $117,822.27 $244,093.73 $320,178.73
12 $340,826.68 $406,288.52 $58,069.15 $725,864.40 $348,219.37 $93,671.01 $189,086.52 $254,548.36
13 $439,341.53 $532,156.87 $77,425.54 $725,864.40 $454,731.34 $122,322.73 $239,593.27 $332,408.61
14 $340,826.68 $419,476.32 $58,069.15 $725,864.40 $361,407.17 $97,218.53 $185,539.00 $264,188.64
15 $439,341.53 $549,430.27 $77,425.54 $725,864.40 $472,004.73 $126,969.27 $234,946.72 $345,035.46
16 $340,826.68 $433,092.19 $58,069.15 $725,864.40 $375,023.04 $100,881.20 $181,876.33 $274,141.84
17 $439,341.53 $567,264.34 $77,425.54 $725,864.40 $489,838.80 $131,766.64 $230,149.36 $358,072.16
18 $340,826.68 $447,150.03 $58,069.15 $725,864.40 $389,080.87 $104,662.75 $178,094.77 $284,418.12
19 $439,341.53 $585,677.29 $77,425.54 $725,864.40 $508,251.75 $136,719.72 $225,196.27 $371,532.03
20 $340,826.68 $461,664.16 $58,069.15 $725,864.40 $403,595.01 $108,567.06 $174,190.47 $295,027.95
21 $439,341.53 $604,687.91 $77,425.54 $725,864.40 $527,262.38 $141,833.58 $220,082.42 $385,428.80
22 $340,826.68 $476,649.42 $58,069.15 $725,864.40 $418,580.26 $112,598.09 $170,159.44 $305,982.17
23 $439,341.53 $624,315.60 $77,425.54 $725,864.40 $546,890.07 $147,113.43 $214,802.57 $399,776.64
24 $340,826.68 $492,121.08 $58,069.15 $725,864.40 $434,051.93 $116,759.97 $165,997.56 $317,291.96
25 $439,341.53 $644,580.40 $77,425.54 $725,864.40 $567,154.86 $152,564.66 $209,351.34 $414,590.20
26 $340,826.68 $508,094.94 $58,069.15 $725,864.40 $450,025.79 $121,056.94 $161,700.59 $328,968.85
27 $439,341.53 $665,502.97 $77,425.54 $725,864.40 $588,077.43 $158,192.83 $203,723.17 $429,884.60
28 $340,826.68 $524,587.30 $58,069.15 $725,864.40 $466,518.15 $125,493.38 $157,264.15 $341,024.77
29 $439,341.53 $687,104.67 $77,425.54 $725,864.40 $609,679.13 $164,003.69 $197,912.31 $445,675.44
30 $340,826.68 $541,614.99 $58,069.15 $725,864.40 $483,545.84 $130,073.83 $152,683.70 $353,472.01
Present Worth (PW) $1,325,257 $2,116,604
Future Worth (FW) $11,930,762 $19,054,952
Annual Worth (AW) $113,305 $180,963
IRR 18.10% 20.9%

25. 25
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Analysis of Alternative 2: After Tax Cash Flow
($2,000,000.00)
($1,500,000.00)
($1,000,000.00)
($500,000.00)
$0.00
$500,000.00
$1,000,000.00
0 2 4 6 8 10 12 14 16 18 20 22 24 26 28 30
EOY
4 Story Residential Selling ATCF With Inflation

26. Analysis of Alternatives
26
Analysis of Alternative 3: construction and Sale & Rental of a 4 storey Residential property
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
 Cost of House : $326,016 tax included
 Cost to construction: $1,488,645
 Amount of money loaned: $1,451,728
 Constructor will not invest anything and the whole cost will be provided by loan
 Assumption is to find the house the same as first price and do this project for 30 years, therefore, we will repeat
this project 15 times
 Marketing cost: 4.0% of sale of the units and 1.5% of Rent
 Operations and maintenance costs are the responsibility of the buyer
 Income for sale of units: $2,906,394 (70% of units= 5 apart, will be sold in first year in order to pay half of loans
and provide the construction cost and the rest of units=2 apart will be rented at the end of second year)
 Before-tax MARR: 10%
 After-tax MARR: 7.6%
 Income tax rate: 26.90%
 Depreciation is in class 1 =4% and appreciation is 2.5% (Book open assumption)
 BV30 for 2 remaining apartments is $256,830.38

27. 27
Analysis of Alternative 3: Depreciation
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Depreciation
Residential
EOY BV of The building
CCA
4%
1
2 $2,706,394.73
3 $2,706,394.73 $0.00
4 $2,598,138.94 $108,255.79
5 $2,494,213.38 $103,925.56
6 $2,394,444.85 $99,768.54
7 $2,298,667.05 $95,777.79
8 $2,206,720.37 $91,946.68
9 $2,118,451.56 $88,268.81
10 $2,033,713.49 $84,738.06
11 $1,952,364.95 $81,348.54
12 $1,874,270.36 $78,094.60
13 $1,799,299.54 $74,970.81
14 $1,727,327.56 $71,971.98
15 $1,658,234.46 $69,093.10
16 $1,591,905.08 $66,329.38
17 $1,528,228.88 $63,676.20
18 $1,467,099.72 $61,129.16
19 $1,408,415.73 $58,683.99
20 $1,352,079.10 $56,336.63
21 $1,297,995.94 $54,083.16
22 $1,246,076.10 $51,919.84
23 $1,196,233.06 $49,843.04
24 $1,148,383.73 $47,849.32
25 $1,102,448.39 $45,935.35
26 $1,058,350.45 $44,097.94
27 $1,016,016.43 $42,334.02
28 $975,375.77 $40,640.66
29 $936,360.74 $39,015.03
30 $898,906.31 $37,454.43
Appreciation (2.5%)
EOY Land Value
Appreciation Rate
2.5%
0 $200,000.00
1 $205,000.00 $5,000.00
2 $210,125.00 $5,125.00
3 $215,378.13 $5,253.13
4 $220,762.58 $5,384.45
5 $226,281.64 $5,519.06
6 $231,938.68 $5,657.04
7 $237,737.15 $5,798.47
8 $243,680.58 $5,943.43
9 $249,772.59 $6,092.01
10 $256,016.91 $6,244.31
11 $262,417.33 $6,400.42
12 $268,977.76 $6,560.43
13 $275,702.21 $6,724.44
14 $282,594.76 $6,892.56
15 $289,659.63 $7,064.87
16 $296,901.12 $7,241.49
17 $304,323.65 $7,422.53
18 $311,931.74 $7,608.09
19 $319,730.04 $7,798.29
20 $327,723.29 $7,993.25
21 $335,916.37 $8,193.08
22 $344,314.28 $8,397.91
23 $352,922.14 $8,607.86
24 $361,745.19 $8,823.05
25 $370,788.82 $9,043.63
26 $380,058.54 $9,269.72
27 $389,560.00 $9,501.46
28 $399,299.00 $9,739.00
29 $409,281.48 $9,982.48
30 $419,513.52 $10,232.04

28. 28
Analysis of Alternative 3: Before Tax Cash flow
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
($600,000.00)
($400,000.00)
($200,000.00)
$0.00
$200,000.00
$400,000.00
$600,000.00
$800,000.00
$1,000,000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EOY
4 Story Residential Selling & Renting BTCF

29. 29
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Analysis of Alternative 3: After Tax Cash flow
Residential Renting
ATCF-Plan #1
EOY BTCF (0%) BTCF (1.6%)
LCF
CCA Taxable Income Income Tax ATCF (0%) ATCF (2%)
Interest Principal
0 ($326,016.00) ($326,016.00) ($1,451,728.80) ($1,451,728.80) ($1,451,728.80)
1 $765,357.53 $777,679.79 $77,425.54 $725,864.40 $700,254.25 $188,368.39 $499,563.60 $511,885.86
2 ($496,215.00) ($504,204.06) $58,069.15 $725,864.40 ($562,273.21) ($151,251.49) ($403,032.66) ($411,021.72)
3 $45,047.28 $46,509.48 $0.00 $0.00 $0.00 $46,509.48 $12,511.05 $32,536.23 $33,998.43
4 $46,483.52 $48,765.02 $0.00 $0.00 $30,930.23 $17,834.79 $4,797.56 $41,685.96 $43,967.46
5 $47,959.77 $51,123.77 $0.00 $0.00 $29,693.02 $21,430.76 $5,764.87 $42,194.90 $45,358.90
6 $49,476.69 $53,589.89 $0.00 $0.00 $28,505.30 $25,084.60 $6,747.76 $42,728.93 $46,842.14
7 $51,034.91 $56,167.63 $0.00 $0.00 $27,365.08 $28,802.54 $7,747.88 $43,287.03 $48,419.74
8 $52,635.03 $58,861.33 $0.00 $0.00 $26,270.48 $32,590.85 $8,766.94 $43,868.10 $50,094.39
9 $54,277.62 $61,675.46 $0.00 $0.00 $25,219.66 $36,455.80 $9,806.61 $44,471.01 $51,868.85
10 $55,963.18 $64,614.57 $0.00 $0.00 $24,210.87 $40,403.69 $10,868.59 $45,094.59 $53,745.97
11 $57,692.18 $67,683.29 $0.00 $0.00 $23,242.44 $44,440.85 $11,954.59 $45,737.59 $55,728.70
12 $59,465.02 $70,886.34 $0.00 $0.00 $22,312.74 $48,573.59 $13,066.30 $46,398.72 $57,820.04
13 $61,282.04 $74,228.50 $0.00 $0.00 $21,420.23 $52,808.26 $14,205.42 $47,076.62 $60,023.07
14 $63,143.52 $77,714.61 $0.00 $0.00 $20,563.42 $57,151.18 $15,373.67 $47,769.85 $62,340.94
15 $65,049.62 $81,349.54 $0.00 $0.00 $19,740.89 $61,608.66 $16,572.73 $48,476.90 $64,776.81
16 $67,000.46 $85,138.21 $0.00 $0.00 $18,951.25 $66,186.96 $17,804.29 $49,196.16 $67,333.92
17 $68,996.00 $89,085.52 $0.00 $0.00 $18,193.20 $70,892.32 $19,070.04 $49,925.97 $70,015.49
18 $71,036.14 $93,196.38 $0.00 $0.00 $17,465.47 $75,730.90 $20,371.61 $50,664.53 $72,824.76
19 $73,120.63 $97,475.62 $0.00 $0.00 $16,766.85 $80,708.77 $21,710.66 $51,409.97 $75,764.96
20 $75,249.07 $101,928.05 $0.00 $0.00 $16,096.18 $85,831.87 $23,088.77 $52,160.30 $78,839.28
21 $77,420.95 $106,558.36 $0.00 $0.00 $15,452.33 $91,106.02 $24,507.52 $52,913.43 $82,050.84
22 $79,635.55 $111,371.08 $0.00 $0.00 $14,834.24 $96,536.84 $25,968.41 $53,667.14 $85,402.67
23 $81,891.98 $116,370.61 $0.00 $0.00 $14,240.87 $102,129.74 $27,472.90 $54,419.08 $88,897.71
24 $84,189.17 $121,561.09 $0.00 $0.00 $13,671.23 $107,889.86 $29,022.37 $55,166.80 $92,538.72
25 $86,525.80 $126,946.42 $0.00 $0.00 $13,124.39 $113,822.03 $30,618.13 $55,907.67 $96,328.29
26 $88,900.33 $132,530.14 $0.00 $0.00 $12,599.41 $119,930.73 $32,261.37 $56,638.96 $100,268.77
27 $91,310.94 $138,315.41 $0.00 $0.00 $12,095.43 $126,219.97 $33,953.17 $57,357.77 $104,362.23
28 $93,755.55 $144,304.93 $0.00 $0.00 $11,611.62 $132,693.31 $35,694.50 $58,061.05 $108,610.43
29 $96,231.73 $150,500.84 $0.00 $0.00 $11,147.15 $139,353.69 $37,486.14 $58,745.59 $113,014.70
30 $475,428.12 $755,513.03 $0.00 $0.00 $10,701.27 $744,811.76 $200,354.36 $275,073.76 $555,158.66
Salvage $376,691.38 PW ($855,340) ($685,130)
BV30 $256,830.38 FW ($7,700,284) ($6,167,957)
AW ($73,129) ($58,577)
IRR 0.90% 3.11%

30. 30
Analysis of Alternative 3: After Tax Cash flow
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
($1,700,000.00)
($1,200,000.00)
($700,000.00)
($200,000.00)
$300,000.00
$800,000.00
$1,300,000.00
$1,800,000.00
0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30
EOY
4 Story Residential Selling & Renting ATCF With Inflation

31. Comparison of Alternatives
31
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Comparing of Alternatives ( Ranking Approach)
Alternatives ATPW (1.6%) ATFW (1.6%) ATAW (1.6%)
1 $166,176 $1,496,015 $14,208
2 $2,116,604 $19,054,952 $180,963
3 ($721,794) ($6,498,027) ($61,711)

32. Winner Alternative 2
32
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
-
5,000,000.00
10,000,000.00
15,000,000.00
20,000,000.00
25,000,000.00
30,000,000.00
35,000,000.00
40,000,000.00
45,000,000.00
1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31
Dollars
Years
Break-Even Analysis
Accumulated Revenue Accumulated Cost

33. Sensitivity Analysis-PW(Alter 2)
33
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
(4,000,000.00)
(2,000,000.00)
-
2,000,000.00
4,000,000.00
6,000,000.00
8,000,000.00
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
PresentWorth
% Error
Construction and Selling of 4 story residential property
ATMARR Loan Interest Rate Construction Cost
house cost Inflation Rate Annual Selling income
Planning Horizen

34. Sensitivity Analysis-AW(Alter 2)
34
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
(300,000.00)
(200,000.00)
(100,000.00)
-
100,000.00
200,000.00
300,000.00
400,000.00
500,000.00
600,000.00
700,000.00
-50% -40% -30% -20% -10% 0% 10% 20% 30% 40% 50%
AnnualWorth
% Error
Construction and Selling of 4 story residential property
ATMARR Loan Interest Rate Construction Cost house cost
Inflation Rate Annual Selling income Planning Horizen

35. Risk analysis
35
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis
Triangular
distribution
initial
investment
Triangular
distribution
first year
revenue
Triangular
distribution
annual fixed
cost
Normal
distribution
annual revenue
growth rate
Normal
distribution
annual variable
cost
percentage
Number of
iteration for
simulation
1000

36. Risk analysis
36
Introduction
Project
Description
Project Costs Project Income Assumptions Analysis

37. 37
Thank You&
Questions?