Sensitivity Analysis
Introduction to Sensitivity and Hurdle Rate
The video explains the concept of sensitivity analysis and how it helps in calculating the residual land value by setting a target development margin. 00:00
Adjusting Sensitivity Values
You can adjust the sensitivity values for sales and costs to understand the impact of these changes on the project’s financial outcomes. 32
Residential vs. Commercial Development
The tool allows you to quickly evaluate the values for both residential and commercial properties based on your assumptions. 62
Sales and Construction Cost Calculations
Enter the sales values and construction costs, either as a total per unit or per square meter/foot, and set the contingency for construction costs. 123
Using the Summary Sheet
Once all values are entered, use the “Save and Refresh” button to update the summary sheet, which consolidates all the assumptions and calculations. 249