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When evaluating cash flow projects, first get the NOI or Net Operating Income. Then calculate the Cap rate. To get the Cap rate divide the NOI by the Price. ie If NOI = $100,000 and you pay $1,000,000 for the project you have a Cap rate of $100,000/$1,000,000 = .10 or 10%. Compare that to your cost of capital. If your cost of capital is 8%, you can effectively yield a 2% difference. Or put another way if your Cap Rate is 10% with some risk, compare that to an alternative investment you can make to assess if it is worth it.
Your cap rate will vary based on 1 primary factor. If a project is riskier, it will typically have a higher cap rate such as a run down apartment complex. You will have to get paid a better return to compensate for the inevitable headaches associated. Such a property may sell for a 13% cap rate. Alternatively another property that is only a few years old in a great part of town with stable tenants may sell for a 7% cap rate. The lower the cap rate the more "expensive" it will be relative to cash flow. However you must look at risk as well as the cap rate.
What else can I help you with?
Is the best-fit line helpful in estimating values of data points?
Yes
The process of estimating values between measured data points is called?
Interpolation.
The best fit line is helpful in estimating values of data points?
True
What is the term for estimating a value that lies between two known data points?
Interpolation
How can we convert Fibonacci story points into hours for estimating the time required for a project?
To convert Fibonacci story points into hours for estimating project time, you can assign a specific number of hours to each Fibonacci point based on past project data. This conversion helps in estimating the time required for completing tasks within the project.
What is important to remember about critical points that are zeros of the denominator?
If the denominator is zero at some point, then the function is not defined at the corresponding points.
Is the best-fit line helpful in estimating vaules of data points true or false?
Yes. (True)
What is the difference between estimating work using story points vs hours?
Estimating work using story points involves assigning a relative value to tasks based on complexity, effort, and risk, while estimating work using hours involves predicting the actual time it will take to complete a task. Story points focus on the overall size and complexity of a task, while hours focus on the specific amount of time needed to complete it.
Why is it important to summarise your points?
Easy to remember you sentenceSaves space in your prestationHelps to pick out main featuresSaves time when writting
How many points in one gram?
There are generally around 28350 points in one gram. This can vary slightly depending on the specific size and shape of the points, but it is a useful approximation for estimating quantities in this context.
What examples of a completion sentence?
"The most important thing to remember is..." "In conclusion, it can be seen that..." "To summarize, the key points are..." "In essence, what this means is..."
What are the key points to remember when taking notes in C7?
When taking notes in C7, remember to focus on key concepts, important details, and any examples provided. Be organized, use bullet points or headings, and review your notes regularly to reinforce your understanding.
