REAE 5321 Real Estate Investments Spring 2006
Class schedule and materials
Announcements:
Midterm Exam April 15 Chapters 9, 10, 11, 12 plus material covered in class
Schedule Adjustment: April 22nd we will cover Chapters 21 and 22. April 29th we will cover Chapter 14 Renovation and Disposition
Case Write-up Deadlines: Angus Cartwright Jr. Due on April 22nd and the JKL Pension Fund due on April 29th. Please note that I will allow you (not require) to team up with one classmate for each case (but please not the same classmate for both cases). Make sure that both names are on the submission and both student will receive the same grade. I typically collect the Angus Cartwright Jr. case.
If you have any trouble downloading the Harvard Business School cases, you can call them and they will fax the case(s) to you. 1 (800) 545-7685
Quiz next Saturday (April 1) over the review materials (TVM review packet and the Investment Problem DCF model).
Text Notes
Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 21 Chapter 22
Chapter 10 Student Notes Construction Budget Excel Template
Project Link (password protected)
Time Value of Money Problem Set Answers
(Any questions? E-mail the Problem Set number and question number and we will review in-class.)
Problem Set 1:
1) 24,464.43
2) 25,093.31
3) 1,738.91
4) 4,755.19
5) 675,764.89
6) 14,381.74
Problem Set 2:
1) 10% compounded semi-annually (1.05^2 = 1.1025; 1.0238^4 = 1.0984)
2) 19,236.15
3) 98,111.31
4) 5,575.46
5) 22,601.66
6) 15.94%
7) 6,357.56
Problem Set 3:
1) ANN: 15 – 25,288.30 25-20,519.45 MO: 15-2,067.95 30-1614.72
2) 14,043.41
3) Yes, NPV = 10,850.30
4) 13.22%
5) PMT = 103,873.36
a. Balance end of year 5 equals 961,283.21
b. Balance end of year 15 equals 801,472.49
6) PV = 854,972.16
7) 79,612.63 + 220,436.31 = 300,048.94
8) PMT = 638.58 (724.26 – 638.58 = 85.68)
9) IRR = 16.2%; NPV = 1,306.20
10) 68,640.81
Problem Set 4:
1) a) 19,876.60 b) 1,903,479.15
2) 48,076.30 + 159,263.83 = 207,340.13
3) Investment 1 IRR = 9.57% Investment 2 IRR = 10.18% or 9.94% assuming annual compounding
4) N=60, I = 12%, Pmt = 657.56, FV= 88,000 then 657.56 (pmt) + 120.00 (taxes, insurance, maintenance) = $777.56 rent
5) $1,365.86
6) 8.5%
7) 12.14%
8) NPV = $209.94 IRR = 12.27%
9) a) 10.36% b) 4,378.29
10) 163,028.46
11) 1,294.88
12) 137,243.36
Downloads:
Review Materials for Real Estate Investment Analysis
Investment Problem Spreadsheet Example