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  • Case Study Z01

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    Raj Malhotra
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    Mr. Akash purchased an investment flat that is scheduled to be completed in 38 months. The document asks to calculate Mr. Akash's rental income over 10 years assuming the rent increases 10% annually, and show his cash flow including furniture costs. It also asks to model scenarios where rent increases 5% annually or possession is delayed 12 months.

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    Mr. Akash purchased an investment flat that is scheduled to be completed in 38 months. The document asks to calculate Mr. Akash's rental income over 10 years assuming the rent increases 10% annually, and show his cash flow including furniture costs. It also asks to model scenarios where rent increases 5% annually or possession is delayed 12 months.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    6 views1 page

    Case Study Z01

    Uploaded by

    Raj Malhotra
    Mr. Akash purchased an investment flat that is scheduled to be completed in 38 months. The document asks to calculate Mr. Akash's rental income over 10 years assuming the rent increases 10% annually, and show his cash flow including furniture costs. It also asks to model scenarios where rent increases 5% annually or possession is delayed 12 months.

    Copyright:

    Attribution Non-Commercial (BY-NC)
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
    of 1

    Financial Model: Building Blocks Concept Case 1A

    Mr. Akash has purchased a flat as an investment in a new multi-storied building at Park Avenue. The construction is slated to commence on 1st June 2013 and the developer has promised the possession of the flat after 38 months. A similar property can fetch a rental of Rs.20,000/- p.m. from this flat as of today. Mr. Akash expects the rentals to increase 10% y-o-y from now. a) Calculate Mr. Akashs rental income from the time of possession to at least next 10 years thereof b) As and when Mr. Akash gives the flat on rent he will also have to invest in furniture worth Rs.2,00,000/-. Please show Mr. Akashs cash flow from the flat c) Assumption: (1) Property is put on rent immediately upon possession d) Scenarios: a. What if rentals increase only by 5% y-o-y instead of 10% b. What will his rental income be if the developer fails to deliver after 38 months and takes 12 months more

    Case Study jointly developed by Murtuza Rohawala & CA Rishabh Pugalia of Excel Next (www.excelnext.in)

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