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Interviewing for an analytical role often involves a technical skills test on Excel, so we have put together an Excel test and accompanying Solution Set.
Instructions: in 3 hours or less, using the assumptions given in the Assumptions tab, build out an 8-year annual projection model for the ground-up development of an apartment building asset. This will include one dedicated Sources and Uses of funds tab, and one dedicated Cash Flow and Equity Waterfall tab.
Questions to answer:
1. What is the going-in cap rate for this transaction at stabilization?
2. What is the Elapsed Year 5 cash-on-cash return?
3. What is the total profit to the Sponsor?
4. Based solely off of the financial returns, would you do this deal if you were the Investor? Why/why not?
5. Assuming a project annual discount rate of 15%, does the project create value according to the NPV calculation?