Decision Metrics - Summary
Introduction to Cost Columns
Begin by understanding the three columns that show total cost with and without GST. These columns help in tracking total project costs and comparing them with debt and equity allocations.
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Managing Debt and Equity
Learn how to manage the split between debt and equity in your project. This includes ensuring that contributions for land purchase, construction, and equity buffer are accurately accounted for.
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Setting Hurdle Rates and Residual Land Value
Set your hurdle rate to determine the minimum return required, and calculate the residual land value based on your target development margin. Adjust values iteratively for accurate projections.
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Analyzing Decision Metrics
Analyze key metrics such as construction versus total development cost (TDC), land versus total sale value, and construction versus total sale value. Use these metrics to evaluate the project’s financial health.
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