NPV and IRR

Initial Purchase Price

Enter a number that specifies the initial purchase amount of the associated building.

The initial purchase price is one of several building constants that the system uses to calculate the building budget.

Cap Rate Percent

Enter a number that specifies the cap rate percent.

The system uses the cap rate percent to calculate the building's sales price and the net proceeds from the sale of the building. The system calculates stabilized Net Operating Income (NOI) based on revenue and expenses (except capital expenditures) for a year that you determine to be stable. The system uses the NOI and the Cap Rate Percent to calculate the selling price. You can define the cap rate percent to meet the needs.

Note: The system uses the cap rate percent only when you generate the Valuation Report (R15L111).Enter the percentage as a whole number. For example, enter 15 to specify 15 percent.

Discount Rate Percent

Enter a number that specifies the discount rate percent.

The discount rate percent is one of several building constants that the system uses to calculate a budget. This value might represent the rate of inflation or the interest rate of a competing investment. The discount rate percent is used to calculate the Net Present Value (NPV) of an investment. The NPV uses a discount rate and a series of future payments and income.

Note: The system uses the discount rate percent only when you generate the Valuation Report (R15L111).Enter the percentage as a whole number. For example, enter 15 to specify 15 percent.

Selling Cost Percent

Enter an amount that specifies the selling cost percent, which is the cost of selling the property.

Note: The system uses the selling cost percent only when you generate the Valuation Report (R15L111).Enter the percentage as a whole number. For example, enter 15 to specify 15 percent.

Year for Stabilized NOI (year for stabilized net operating income)

Enter a number that specifies the year that the system uses to determine the stabilized net operating income.

Note: The system uses this value only when you generate the Valuation Report (R15L111).