FMT306: Urban & Redevelopment Authority has launched a site in Marina Gardens Crescent: Strategic Asset, Property And Facilities Management Assignment, SUSS

Question 1

Urban & Redevelopment Authority has launched a site in Marina Gardens Crescent.

Link to the Marina South site:
https://www.ura.gov.sg/maps/?service=GLSRELEASE&site=1004
(You may refer to the Appendices uploaded in Canvas)
As the asset manager, appraise and compute the minimum bid price for the land (round up to the nearest hundred thousand) with the following conditions:
Internal rate of return must be between 10% to 11%.

Use discounted cash flow analysis to compute for a 13 years period.
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 and name it as “IRR” showing your IRR calculation.
(b) A worksheet and name it as “Cash In” showing your cash in calculation.
(c) A worksheet and name it as “Cash Out” showing your cash out calculation.
(d) A worksheet and name it as “Summary” fill in the following information:

Question 2a
The NPV and IRR of three independent projects – A, C, and E are as shown below. Assume the hurdle rate is 8% for all the three projects.

Question 2b

Explain the differences between NPV and IRR analysis with regards to the size of a project. You are to support your answers with relevant examples.
(10 marks)

Question 2c
Demonstrate the shortfalls of using IRR in real estate investment decisions.

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