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  • Assignment 2

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    Vanya Arora
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    This document outlines the cash flow projections for a construction project consisting of two towers over 5 years. It provides details on costs such as land, construction, consultants, wages, and interest. It also includes projections for loan amounts, pre-bookings, and bookings. The net present value is calculated to be $30.14 million with an internal rate of return of 11%, indicating a profitable investment opportunity.

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    assignment 2 building economics

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    ASSIGNMENT 2

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    This document outlines the cash flow projections for a construction project consisting of two towers over 5 years. It provides details on costs such as land, construction, consultants, wages, and interest. It also includes projections for loan amounts, pre-bookings, and bookings. The net present value is calculated to be $30.14 million with an internal rate of return of 11%, indicating a profitable investment opportunity.

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    © All Rights Reserved
    Download as PDF, TXT or read online from Scribd
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    16 views1 page

    Assignment 2

    Uploaded by

    Vanya Arora
    This document outlines the cash flow projections for a construction project consisting of two towers over 5 years. It provides details on costs such as land, construction, consultants, wages, and interest. It also includes projections for loan amounts, pre-bookings, and bookings. The net present value is calculated to be $30.14 million with an internal rate of return of 11%, indicating a profitable investment opportunity.

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    © All Rights Reserved
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    of 1

    CONSTRUCTION PROJECT CASHFLOW

    Information Assumptions IN CR
    Project - Construction Project Initial Cost of land - 25 Sales Pre-Booking Booking
    Status - Tower 1 - Ready to Move (in Q3' 2026) Cost of Construction (3,200 / Sq ft) 3 BHK 0.4 2
    Tower 2 - Ready to Move (in Q1' 2027) Tower 1 - 24.9 Funding
    Area - 2000 sqmt (21500 ssqft) Tower 2 - 24.9 Pre-Booking 20% per Booking
    Type of Ownership - Freehold Consultants - 1.98 Loan
    Furnishing - Fully-Furnished Eminities - 5 Principal 50
    Facing Direction - North - East Wages - 1.2 Interest Rate 9%
    Overlooking - Garden/Park, Main Road Advertisements - 2 Interest Payable 12
    Age of Construction - New Construction Brokerage - 0.4 total amount to pay 62
    Number Of Units - Finishing - 4
    Tower 1 - 50 Units /10 Floors 1500 sqft/unit Total - 89
    Tower 2 - 50 Units /10 Floors 1500 sqft/unit

    Cash-Flow Table *Note - All amounts are in ₹ Cr.

    Costs Time Period Year 2023 Year 2024 Year 2025 Year 2026 Year 2027 Total
    Q1' 2023 Q2' 2023 Q3' 2023 Q4' 2023 Q1' 2024 Q2' 2024 Q3' 2024 Q4' 2024 Q1' 2025 Q2' 2025 Q3' 2025 Q4' 2025 Q1' 2026 Q2' 2026 Q3' 2026 Q4' 2026 Q1' 2027 Q2' 2027 Q3' 2027 Q4' 2027
    Out-Flow
    Initial Cost of land - 25 25
    Cost of Construction 0
    Tower 1 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 24.9
    Tower 2 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 1.66 24.9
    Consultants 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 0.2 2.2
    Eminities 0.625 0.625 0.625 0.625 0.625 0.625 0.625 0.625 5
    Wages 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 0.06 1.2
    Advertisements 0.25 0.25 0.25 0.25 0.25 0.25 0.25 0.25 2
    Brokerage 0.0666 0.0666 0.0666 0.0666 0.0666 0.0666 0.3996
    Finishing 0.5 0.5 0.5 0.5 0.5 0.5 0.5 0.5 4
    Interest 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 3.1 62
    Inflow 0
    Loaned Amount 30 2.5 3.1 3.6 3.6 3.6 3.6 50
    Pre-Booking 6.66 6.66 13.36 6.66 6.66 40
    Booking 26.66 26.66 53.36 26.66 26.66 160
    Q' Total
    Out-Flow 30.02 5.02 6.68 6.68 6.48 6.48 6.48 6.48 6.68 6.68 6.68 6.98 7.9216 7.9216 7.9216 6.2616 6.4616 4.8016 4.735 4.235 151.5996
    In-Flow 30 2.5 3.1 0 0 0 0 0 3.6 3.6 3.6 3.6 6.66 6.66 40.02 33.32 60.02 26.66 26.66 0 250
    Net-Cash Flow -0.02 -2.52 -3.58 -6.68 -6.48 -6.48 -6.48 -6.48 -3.08 -3.08 -3.08 -3.38 -1.2616 -1.2616 32.0984 27.0584 53.5584 21.8584 21.925 -4.235 98.4004

    NPV & IRR Calculations Decision statement


    DR 5% THIS ASSET WOULD BE A GREAT INVESTMENT OPPORTUNITY
    NPV for this Project - $30.14
    IRR for this Project - 11%

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