Organized home questions
(1) With an initial loan commitment of $1,225,000 and using the initial terms outlined in the case, what is ARP’s expected return if the property is held for six years? Eleven years? Assume that ARP and its investors are in the 31% marginal tax bracket at the federal level and the 6% bracket at the state level. Assume a 28% capital gains tax rate and standard depreciation schedules. Similar projects in the Atlanta market have sold at cap rates of between 8.5% and 11%.
(2) What are the pros and cons of the transaction excluding the new cost uncertainty?
(3) Does the enhanced design required by The Organized Home add value to the real estate? Does it add value to the company’s brand? If The Organized Home moved out of the building, would the design increase/decrease leasing opportunities?
(4) Do you think the development process, primarily the building design process, is different for major national retailers such as Walgreen’s, CVS, or Revco?
(5) Review TOH’s financial statements. What is the company’s financial condition? What will be the financial impact of the company’s growth plans?
(6) What is your impression of the value placed upon limited out-parcel availability at North Point Mall? Is the location really as good as Adams thinks?
(7) Has Adams missed any options during his thought process?
(8) Assess the risks of each of the options defined by Adams as well as any options you believe to be superior.
(9) Assess the probability of the options defined by Adams as well as any new options. Which outcome do you believe is most likely. Which mitigates the greatest amount of risk?
(10) With the new debt and equity structures that might result from the potential options, quantify ARP’s return using a discounted cash-flow model similar to that required in Question 1. Use the same basic cap rate and tax assumptions. List and defend any additional assumptions.
(11) Develop and summarize an action plan for Adams. What should he do and what should his negotiating strategy be? This should be in the form of an executive summary
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.Read more
Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.Read more
Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.Read more
Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.Read more
By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.Read more