Angus Cartwright IV Harvard Case Solution & Analysis

Angus Cartwright IV Case Solution

Introduction

This case describes the value of real estate business, where two investors named Judy and John DeRight were engaged in expanding the investment activities in the real estate in order to earn profits that were expected to be higher than the other industry level in the recent period. In order to do so, they were advised by Angus Cartwright, who was an investment advisor in Virginia.

Thus, in order to fill the criteria, both De Right family partners were considering valuing the property, which they wanted to hold for a particular period of time in order to know the worth at the end of the sales to receive the capital gains over the investment.Therefore,the case illustrates the importance of using the financial and accounting tools to analyze the net value of each of the selected property named as Alison Green, 900 Stony Walk, Ivy Terrace and The Fowler Building.

The results from the property valuation would clearly show which property would be more preferable to hold the investment in order to earn high profits and capital gains. Therefore, if such a valuation would be implemented, then it can benefit all the investors engaged in the deal to take decision about the future holding or to sell out at the desire year.

Financial Analysis and Property valuation

The following result shows that each property has been valued according to the expected outcome generated by determining the key factors such as occupied space for cash flows, Tax benefits, modest interest rates etc. Therefore,in order to critically assess each of the selected property and make the decision of which property would be considered as a best deal for all the investors at a given time, the analysis indicates all the expected results and outcomes that each investor might be interested to take considerable decisions.

Property Valuation

Alison Green

In order to analyze all the related properties for the investment purpose, the reference of Alison Green would give an idea of how to value the other properties based on the tools and techniques performed by the property itself. Therefore,it shows that the purchasing price of Alison Green was 20 million and was expected to grow around$400000 in the end of the last projected year. This indicates that the total capital gain on sale would be 20% of the invested amount in the property.

However, this was not the case for investors as most of the amount was in the form of debt, thus they should make the decision regarding the ability of the property to overcome the debt amount in terms of loan repayments. Thus, it is concluded that the total internal rate of return at the end of the last projected year would be 13.91%, which shows positive outcomes for the investment purpose.

900 Stony Walk

The analysis has been done on the projected result of 900 Stony Walk by the help of the outcome generated for Alison Green. The property shows the same occupied space that is 95%, therefore all the rental income and cash flows would be generated through this occupied space. It has been analyzed that the value of purchase of the property is 15 million and is expected to grow by the value of 17 million at the end of the last year, which indicates that the total capital gain for the investors would be 2 million...................

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