FMT306: Assuming you are the Asset Manager of the joint Venture Company Created for this Project: Strategic Asset Property and Facilities Management Assignment, SUSS, Singapore

Question 1
Assuming you are the asset manager of the joint venture company created for this project and with the aid of MS Excel, appraise the land price for this white site using the discounted cash flow analysis.

Embed your MS Excel file into your MS Word file (MS Word>INSERT>Object>Create from File>Browse>Select your MS Excel file>Insert>Select “Display as an icon”>Click “OK”). In one excel file, create:
(a) A worksheet to show IRR calculation.
(b) A worksheet to fill in the following information:

Question 2
(a) Suppose you have three independent projects – A, B, and C. Assume the hurdle rate is 12% for all three projects. Their NPVs and IRRs are as shown below:

Assuming the projects are mutually exclusive, which of the following is the most economically feasible project? Justify your answers with respect to the IRR and NPV values given.

(b) Explain with relevant examples, the differences between the NPV and IRR analysis with regard to the size of a project.

Question 3
Demonstrate the use of the Internal Rate of Return (IRR) to evaluate real estate investment by the asset manager and answer the following questions:
(a) Illustrate the concept of IRR with an example.

(b) Explain how asset managers use IRR in real estate investment. Provide calculated examples to support your answers.

(c) Describe the shortfalls in using IRR for real estate investment.