The differences between levered (with debt) and unlevered (without debt) deals appear in lines C and J. Note that both deals return a Year 1 5% cash-on-cash return to equity, but the dollar amounts of equity (line B) and Cash Flow to Equity (line K) are significantly different.
Post any questions below.
I want to make sure I understand levered and unlevered analysis of a acquisition view.
Both analysis approaches are done to see or figure out the debt service expense impacts the cash flow to equity on an asset?
Hi Erik, yes, correct. – Bruce