Assignment - Financial Appraisal

SCHOOL OF ARCHITECTURE, BUILDING AND DESIGN
BACHELOR OF QUANTITY SURVEYING (HONOURS)
QSB60303 DEVELOPMENT ECONOMICS
AUGUST 2018 SEMESTER
GROUP ASSIGNMENT
GROUP MEMBERS:
NO. NAME STUDENT ID
1. PANG KAI YUN 0319802
2. EVON WEE YEE JING 0325091
3. LEE ZHI XIN 0324563
4. LIM KAR YAN 0325602
5. SAM WEI YIN 0320364
6. SANDRABROOKE GOH 0329884
7. TERENCE TAN PENG ONG 0320275
8. WONG DE-VIN 0319814
LECTURER : MS TAY SHIR MEN
PUAN NURULHUDA HASHIM
SUBMISSION DATE : 28 NOVEMBER 2018

TABLE OF CONTENTS
CONTENT PAGE NUMBER
1.0 Number of Unit 2
2.0 Financial Appraisal 4
3.0 Cash Flow based on ‘Sell-then-Build’ concept
3.1 Monthly Cash Inflow
3.2 Monthly Cash Outflow
3.3 Quarter-Yearly Cash Flow
8
8
12
16
4.0 NPV
4.1 Comment on the viability of the project
20
21
5.0 Cash Flow based on a ‘Build-then-Sell’ concept 22
Reference 24
Appendix 25
1

1.0 Number of Unit
A Land Size
10 acres 10 x 43,560.00 sq. ft = 435,600.00 sq. ft
1 rood 1 x 10,890.00 sq. ft = 10,890.00 sq. ft
10 pole 10 x 272.25 sq. ft = 2,722.50 sq. ft
449,212.50 sq. ft
B Double Storey Shop/Office (26' x 80')
15% of total unit 15% x 164 unit = 24 unit
Number of unit
Allow an additional 13' x 80' for corner unit; 4' x 80' for end unit
Intermediate unit (26' x 80') 2,080 x 18 unit = 37,440 sq. ft
Corner unit (39' x 80') 3,120 x 3 unit = 9,360 sq. ft
End unit (30' x 80') 2,400 x 3 unit = 7,200 sq. ft
24 unit 54,000 sq. ft
Maximum 15 units / block
Number of block 24 / 10 unit = 2.4 block
or say = 3 block
C Double Storey Terrace (22' x 75')
Number of unit
77 unit 134,925 sq. ft
or say = 7 block
D Double Storey Low Cost (20' x 60')
30% of development 30% x 269,527.50 sq. ft = 80,858.25 sq. ft
Number of unit
63 unit 79,800 sq. ft
or say = 5 block

1.0 Number of Unit
E Development area
60% of Land Area 60% x 449,212.50 sq. ft = 269,527.50 sq. ft
Double Storey Shop/Office = 54,000.00 sq. ft
Double Storey Terrace = 134,925.00 sq. ft
Double Storey Low Cost = 79,800.00 sq. ft
268,725.00 sq. ft
*Not exceeding 60% of land area

2.0 Financial Appraisal
A Gross Development Value (GDV) RM RM
Double Storey Shop/Office
Intermediate unit RM 850,000.00 x 18 = 15,300,000.00
Corner unit RM 1,600,000.00 x 3 = 4,800,000.00
End unit RM 1,000,000.00 x 3 = 3,000,000.00
23,100,000.00
Double Storey Terrace
Corner unit RM 650,000.00 x 7 = 4,550,000.00
End unit RM 500,000.00 x 7 = 3,500,000.00
33,250,000.00
Double Storey Low Cost
Corner unit RM 45,000.00 x 5 = 225,000.00
End unit RM 45,000.00 x 5 = 225,000.00
2,835,000.00
59,185,000.00
Less: 7% bumiputra discount from 30% reservation (1,242,885.00)
Total Gross Development Value 57,942,115.00

B Cost of Developement
B.1 Land Cost
Land Purchased @ RM15.00/fs 449,212.50 x 15.00 = 6,738,187.50
B.2 Building Cost
i. Double Storey Shop/Office
Intermediate Lot 3,600 fs x RM 70.00 x 18 = 4,536,000.00
Corner Lot 6,500 fs x RM 80.00 x 3 = 1,560,000.00
End Lot 3,600 fs x RM 80.00 x 3 = 864,000.00
6,960,000.00
ii. Double Storey Terrace
Intermediate 1,500 fs x RM 75.00 x 63 = 7,087,500.00
Corner 1,500 fs x RM 85.00 x 7 = 892,500.00
End 1,500 fs x RM 85.00 x 7 = 892,500.00
8,872,500.00
iii. Double Storey Low Cost
Intermediate 900 fs x RM 35.00 x 53 = 1,669,500.00
Corner 900 fs x RM 40.00 x 5 = 180,000.00
End 900 fs x RM 40.00 x 5 = 180,000.00
2,029,500.00
Total Building Cost 17,862,000.00
iv. Earthwork
5% of Building Cost RM 17,862,000.00 x 5% = 893,100.00
v. Infrastructure Costs
10% of Building Cost RM 17,862,000.00 x 10% = 1,786,200.00
Total Construction Cost 20,541,300.00

B.3 Administrative Cost
i. Professional fees
9% of construction costs RM 20,541,300.00 x 9% = 1,848,717.00
ii. Administrative fees
2% of GDV RM 57,942,115.00 x 2% = 1,158,842.30
iii. Plan fees
RM 2,000 per unit RM 2,000.00 x 164 = 328,000.00
iv. Contributions & fees
2% of construction costs RM 20,541,300.00 x 2% = 410,826.00
v. Advertisement & marketing
1% of GDV RM 57,942,115.00 x 1% = 579,421.15
vi. Conversion premium
Commercial @ 20% of land value
54,000.00 fs x RM15 RM 810,000.00 x 20% = 162,000.00
Residential @ 15% of land value
214,725.00 fs x RM15 RM 3,220,875.00 x 15% = 483,131.25
vii. Subdivision
RM 1,500 / unit RM 1,500.00 x 164 = 246,000.00
viii. Legal Fees
RM 2,500 / unit RM 2,500.00 x 164 = 410,000.00
Total Administrative Cost 5,626,937.70

B.4 Finance Cost
i. Cost of Finance (Assume Full)
5.5% p.a + 6.5% p.a 2 x RM 10,270,650.00 x 12% = 616,239.00
ii. Interest on Loan for Purchase of Land
P[((1+i)^n)-1) RM 6,500,000.00 x [(1+0.09)^5-1] = 3,501,055.71
Total Financing Cost 4,117,294.71
B.5 Contigencies
5% of Construction Cost RM 20,541,300.00 x 5% 1,027,065.00
Gross Development Cost 38,050,784.91
C Gross Profit Excluding Taxation
Gross Development Value (GDV) 57,942,115.00
Development Cost (38,050,784.91)
19,891,330.09
D Rate of Return
% of Gross Profit (Profit/GDV) RM 0.34 x 100% 34%

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Sales Projection
1 Double Storey Shop/Office 39.03% 22,614,900.00 10.0% 10.0% 10.0% 10.0%
2 Double Storey Terrace 56.18% 32,551,750.00 30.0% 20.0% 20.0% 10.0%
3 Double Storey Low Cost 4.79% 2,775,465.00 50.0%
Monthly Total 100.00% 57,942,115.00 20.76% 0.00% 0.00% 0.00% 0.00% 15.14% 0.00% 0.00% 17.53% 0.00% 0.00% 9.52%
% of Cumulative Sales 20.76% 20.76% 20.76% 20.76% 20.76% 35.90% 35.90% 35.90% 53.43% 53.43% 53.43% 62.95%
Construction Work Programme Months
1 Earthworks + Foundation 3 100.00% 6.92% 6.92% 6.92% 15.14% 17.53% 9.52%
2 R.C. Framework 9 100.00% 2.31% 2.31% 2.31% 4.83% 4.83% 4.83% 10.67% 10.67% 10.67% 9.52%
3 Walls, Doors & Windows Frame 7 100.00% 5.13% 5.13% 8.63% 8.63% 8.63% 13.40%
4 Roofing, Elec Wiring & Plumbing 7 100.00% 7.63% 7.63% 7.63% 10.01%
5 Internal & External Plastering 8 100.00% 6.68% 8.04%
6 Sewerage Works 5 100.00%
7 Drainage Works 6 100.00%
8 Roadworks + Infrastructure Works 8 100.00%
Sales Proceeds
20.76% 15.14% 17.53% 9.52%
1 Signing of S&P Agreement 10.00% 5,794,211.50 1,202,701.50 877,184.00 1,015,957.25 551,666.50
6.92% 6.92% 6.92% 15.14% 17.53%
2 Earthwork + Foundation 10.00% 5,794,211.50 400,900.50 400,900.50 400,900.50 877,184.00 1,015,957.25
2.31% 2.31% 2.31% 4.83% 4.83% 4.83% 10.67% 10.67% 10.67%
3 R.C. Framework 15.00% 8,691,317.25 200,450.25 200,450.25 200,450.25 419,746.25 419,746.25 419,746.25 927,724.88 927,653.26 927,653.26
5.13% 5.13% 8.63% 8.63% 8.63%
4 Walls, Doors & Window Frame 10.00% 5,794,211.50 297,126.50 297,126.50 500,317.95 500,317.95 500,317.95
7.63% 7.63% 7.63%
5 Roofing, Elec Wiring & Plumbing 10.00% 5,794,211.50 442,263.25 442,263.25 442,263.25
6.68%
6 Internal & External Plastering 10.00% 5,794,211.50 386,980.34
7 Sewerage Works 5.00% 2,897,105.75
8 Drainage Works 2.50% 1,448,552.88
9 Roadworks + Infrastructure Works 2.50% 1,448,552.88
10 On the date the Purchaser takes VP of the said 17.50% 10,139,870.13
Property with the water and electricity supply
ready for connection
11 On the date the Purchaser takes VP of the 2.50% 1,448,552.88
said Property in item 10 where the Developer
has delivered to the Purchaser or the Purchaser's
Solicitor the original issue document of title to the
said Building Lot registered in the name of the
Purchaser
Property as in item 10 and to be held by the
Developer's solicitor as stakeholder for payment
to the Developer (2.5% at the expiry of the period
8 months; 2.5% at expiry of the period 24 months)
Monthly Total Cash Flow 100.00% 57,942,115.00 1,202,701.50 400,900.50 400,900.50 601,350.75 200,450.25 1,077,634.25 1,296,930.25 716,872.75 1,732,830.00 2,886,263.33 1,870,234.46 2,808,881.30
Monthly Cumulative Cash Inflow 57,942,115.00 1,202,701.50 1,603,602.00 2,004,502.50 2,605,853.25 2,806,303.50 3,883,937.75 5,180,868.00 5,897,740.75 7,630,570.75 10,516,834.08 12,387,068.54 15,195,949.84
Quaterly Total Cash Inflow 57,942,115.00 2,004,502.50 1,879,435.25 3,746,633.00 7,565,379.09
Quaterly Cumulative Cash Inflow 2,004,502.50 3,883,937.75 7,630,570.75 15,195,949.84
Assumptions:
- % of sale proceeds based on S&P agreement (Clause 5) third schedule
- The earthwork and foundation are paid simultaneously.
- The roadworks and infrastructure works are paid simultaneously.
- Item 2 - 9 are paid within 30 days after the receipt by the Purchaser of the Developer's written notice of the completion of such items.
Amount
(RM)
Sales
Precentage
DescriptionItem Q1
2013
Q4Q2 Q3

Sales Projection
1 Double Storey Shop/Office 39.03% 22,614,900.00
2 Double Storey Terrace 56.18% 32,551,750.00
3 Double Storey Low Cost 4.79% 2,775,465.00
Monthly Total 100.00% 57,942,115.00
% of Cumulative Sales
1 Earthworks + Foundation 3 100.00%
2 R.C. Framework 9 100.00%
3 Walls, Doors & Windows Frame 7 100.00%
4 Roofing, Elec Wiring & Plumbing 7 100.00%
5 Internal & External Plastering 8 100.00%
Sales Proceeds
1 Signing of S&P Agreement 10.00% 5,794,211.50
2 Earthwork + Foundation 10.00% 5,794,211.50
3 R.C. Framework 15.00% 8,691,317.25
4 Walls, Doors & Window Frame 10.00% 5,794,211.50
5 Roofing, Elec Wiring & Plumbing 10.00% 5,794,211.50
6 Internal & External Plastering 10.00% 5,794,211.50
7 Sewerage Works 5.00% 2,897,105.75
8 Drainage Works 2.50% 1,448,552.88
Purchaser
Monthly Total Cash Flow 100.00% 57,942,115.00
Monthly Cumulative Cash Inflow 57,942,115.00
Quaterly Total Cash Inflow 57,942,115.00
Quaterly Cumulative Cash Inflow
Assumptions:
Amount
(RM)
Sales
Precentage
DescriptionItem
M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23 M24
10.0% 20.0% 30.0%
20.0%
50.0%
0.00% 0.00% 17.53% 0.00% 0.00% 7.81% 0.00% 0.00% 11.71% 0.00% 0.00% 0.00%
62.95% 62.95% 80.48% 80.48% 80.48% 88.29% 88.29% 88.29% 100.00% 100.00% 100.00% 100.00%
17.53% 7.81% 11.71%
17.53% 7.81% 11.71%
13.40% 17.53% 7.81% 11.71%
10.01% 10.01% 27.55% 7.81% 11.71%
8.04% 8.04% 12.42% 12.42% 12.42% 20.23% 11.71%
17.66% 17.66% 21.56% 21.56% 21.56%
13.41% 14.98% 14.98% 14.98% 20.83% 20.83%
10.06% 10.06% 11.36% 11.36% 11.36% 22.90% 11.45% 11.45%
17.53% 7.81% 11.71%
1,015,957.25 452,298.00 678,447.00
9.52% 17.53% 7.81% 11.71%
551,666.50 1,015,957.25 452,298.00 678,447.00
9.52% 17.53% 7.81% 11.71%
827,499.75 1,523,935.88 678,447.00 1,017,670.50
13.40% 13.40% 0.00% 17.53% 7.81% 11.71%
776,151.20 776,151.20 1,015,957.25 452,298.00 678,447.00
10.01% 10.01% 10.01% 27.55% 7.81% 11.71%
580,179.88 580,179.88 580,179.88 1,596,137.13 452,298.00 678,447.00
8.04% 8.04% 8.04% 12.42% 12.42% 12.42% 20.23% 0.00% 0.00% 11.71%
465,789.84 465,789.84 465,789.84 719,779.16 719,779.16 719,779.16 1,172,077.16 678,447.00
17.66% 17.66% 21.56% 21.56% 21.56%
511,576.45 511,576.45 624,650.95 624,650.95 624,650.95
13.41% 14.98% 14.98% 14.98% 20.83% 20.83% 0.00%
194,311.10 216,926.00 216,926.00 216,926.00 301,731.88 301,731.88
10.06% 10.06% 11.36% 11.36% 11.36% 22.90% 11.45%
145,733.33 145,733.33 164,579.08 164,579.08 164,579.08 331,674.49 165,837.25
100.00%
10,139,870.13
100.00%
1,448,552.88
3,201,287.17 1,822,120.92 2,061,926.97 5,871,766.66 719,779.16 1,366,388.26 3,424,344.16 728,502.45 1,406,949.45 4,657,841.33 926,382.83 12,378,911.20
18,397,237.01 20,219,357.93 22,281,284.90 28,153,051.55 28,872,830.71 30,239,218.97 33,663,563.13 34,392,065.58 35,799,015.04 40,456,856.37 41,383,239.20 53,762,150.39
7,085,335.06 7,957,934.07 5,559,796.07 17,963,135.35
22,281,284.90 30,239,218.97 35,799,015.04 53,762,150.39
Q2 Q3Q1
2014
Q4

Sales Projection
Monthly Total 100.00% 57,942,115.00
Sales Proceeds
3 R.C. Framework 15.00% 8,691,317.25
7 Sewerage Works 5.00% 2,897,105.75
8 Drainage Works 2.50% 1,448,552.88
Purchaser
Assumptions:
Amount
(RM)
Sales
Precentage
DescriptionItem
M25 M26 M27 M28 M29 M30 M31 M32 M33 M34 M35 M36
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
0.00%
0.00% 0.00% 0.00%
11.45%
165,837.25
50.00%
1,448,552.88
165,837.25 - - - - - - 1,448,552.88 - - - -
53,927,987.64 53,927,987.64 53,927,987.64 53,927,987.64 53,927,987.64 53,927,987.64 53,927,987.64 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51
165,837.25 - 1,448,552.88 -
53,927,987.64 53,927,987.64 55,376,540.51 55,376,540.51
2015
Q1 Q3Q2 Q4

Sales Projection
Monthly Total 100.00% 57,942,115.00
Sales Proceeds
3 R.C. Framework 15.00% 8,691,317.25
7 Sewerage Works 5.00% 2,897,105.75
8 Drainage Works 2.50% 1,448,552.88
Purchaser
Assumptions:
Amount
(RM)
Sales
Precentage
DescriptionItem
M37 M38 M39 M40 M41 M42 M43 M44 M45 M46 M47 M48
0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00% 0.00%
100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00% 100.00%
50.00%
1,448,552.88
- - - - - - - - - - - 1,448,552.88
55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 55,376,540.51 56,825,093.39
- - - 1,448,552.88
55,376,540.51 55,376,540.51 55,376,540.51 56,825,093.39
2016
Q3 Q4Q2Q1

M1 M2 M3 M4 M5 M6 M7 M8 M9 M10 M11 M12
Construction Costs
1 Earthwork + Foundation 4 10.00% 2,054,130.00 1,027,065.00 513,532.50 513,532.50
2 R.C. Framework 9 25.00% 5,135,325.00 570,591.67 570,591.67 570,591.67 570,591.67 570,591.67 570,591.67 570,591.67 570,591.67 570,591.67
3 Walls, Doors, & Windows Frame 7 15.00% 3,081,195.00 440,170.71 440,170.71 440,170.71 440,170.71 440,170.71
4 Roofing, Elec. Wiring & Plumbing 7 15.00% 3,081,195.00 440,170.71 440,170.71 440,170.71
5 Internal & External Plastering 8 15.00% 3,081,195.00 385,149.38
6 Sewerage Works 5 5.00% 1,027,065.00
7 Drainage Works 6 5.00% 1,027,065.00
8 Roadworks + Infrastructure Works 8 10.00% 2,054,130.00
Total Construction Cost 100.00% 20,541,300.00
Monthly Total Cash Outflow (Before Retention) 1,027,065.00 513,532.50 1,084,124.17 570,591.67 570,591.67 570,591.67 1,010,762.38 1,010,762.38 1,450,933.10 1,450,933.10 1,836,082.47
Monthly Cumulative Outflow (Before Retention) 1,027,065.00 1,540,597.50 2,624,721.67 3,195,313.33 3,765,905.00 4,336,496.67 5,347,259.05 6,358,021.43 7,808,954.52 9,259,887.62 11,095,970.09
Less Retention (10%, Limit 5%) 1,027,065.00 (102,706.50) (154,059.75) (262,472.17) (319,531.33) (376,590.50) (433,649.67) (534,725.90) (635,802.14) (780,895.45) (925,988.76) (1,027,065.00)
Monthly Cumulative Outflow (After Retention) 924,358.50 1,386,537.75 2,362,249.50 2,875,782.00 3,389,314.50 3,902,847.00 4,812,533.14 5,722,219.29 7,028,059.07 8,333,898.86 10,068,905.09
Monthly Total Cash Outflow (After Retention) 924,358.50 462,179.25 975,711.75 513,532.50 513,532.50 513,532.50 909,686.14 909,686.14 1,305,839.79 1,305,839.79 1,735,006.23
Quarterly Total Cash Outflow 1,386,537.75 2,002,776.75 2,332,904.79 4,346,685.80
Quarterly Cumulative Cash Outflow 1,386,537.75 3,389,314.50 5,722,219.29 10,068,905.09
MonthsItem Description Q4Q2 Q3Q1
2013
Amount (RM)Percentage

Construction Costs
1 Earthwork + Foundation 4 10.00% 2,054,130.00
2 R.C. Framework 9 25.00% 5,135,325.00
3 Walls, Doors, & Windows Frame 7 15.00% 3,081,195.00
4 Roofing, Elec. Wiring & Plumbing 7 15.00% 3,081,195.00
5 Internal & External Plastering 8 15.00% 3,081,195.00
6 Sewerage Works 5 5.00% 1,027,065.00
7 Drainage Works 6 5.00% 1,027,065.00
Monthly Total Cash Outflow (Before Retention)
Monthly Cumulative Outflow (Before Retention)
Less Retention (10%, Limit 5%) 1,027,065.00
Monthly Cumulative Outflow (After Retention)
Monthly Total Cash Outflow (After Retention)
Quarterly Total Cash Outflow
Quarterly Cumulative Cash Outflow
MonthsItem Description Amount (RM)Percentage
M13 M14 M15 M16 M17 M18 M19 M20 M21 M22 M23 M24
440,170.71 440,170.71
440,170.71 440,170.71 440,170.71 440,170.71
385,149.38 385,149.38 385,149.38 385,149.38 385,149.38 385,149.38 385,149.38
205,413.00 205,413.00 205,413.00 205,413.00 205,413.00
171,177.50 171,177.50 171,177.50 171,177.50 171,177.50 171,177.50
256,766.25 256,766.25 256,766.25 256,766.25 256,766.25 256,766.25 256,766.25
1,265,490.80 1,265,490.80 825,320.09 825,320.09 641,915.63 813,093.13 813,093.13 633,356.75 633,356.75 633,356.75 376,590.50 462,179.25
12,361,460.89 13,626,951.70 14,452,271.79 15,277,591.88 15,919,507.50 16,732,600.63 17,545,693.75 18,179,050.50 18,812,407.25 19,445,764.00 19,822,354.50 20,284,533.75
(1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00) (1,027,065.00)
11,334,395.89 12,599,886.70 13,425,206.79 14,250,526.88 14,892,442.50 15,705,535.63 16,518,628.75 17,151,985.50 17,785,342.25 18,418,699.00 18,795,289.50 19,257,468.75
1,265,490.80 1,265,490.80 825,320.09 825,320.09 641,915.63 813,093.13 813,093.13 633,356.75 633,356.75 633,356.75 376,590.50 462,179.25
3,356,301.70 2,280,328.84 2,079,806.63 1,472,126.50
13,425,206.79 15,705,535.63 17,785,342.25 19,257,468.75
Q3 Q4
2014
Q1 Q2

Construction Costs
2 R.C. Framework 9 25.00% 5,135,325.00
6 Sewerage Works 5 5.00% 1,027,065.00
7 Drainage Works 6 5.00% 1,027,065.00
M25 M26 M27 M28 M29 M30 M31 M32 M33 M34 M35 M36
First Moeity
256,766.25
256,766.25 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00
(513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50)
20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50
770,298.75 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
770,298.75
20,027,767.50
2015
Q2Q1 Q4Q3

Construction Costs
2 R.C. Framework 9 25.00% 5,135,325.00
6 Sewerage Works 5 5.00% 1,027,065.00
7 Drainage Works 6 5.00% 1,027,065.00
M37 M38 M39 M40 M41 M42 M43 M44 M45 M46 M47 M48
Second Moeity
0.00 0.00 0.00 0.00 0.00 0.00
20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00 20,541,300.00
(513,532.50) (513,532.50) (513,532.50) (513,532.50) (513,532.50) 0.00
20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,027,767.50 20,541,300.00
0.00 0.00 0.00 0.00 0.00 513,532.50
513,532.50
20,541,300.00
Q3Q2
2016
Q4Q1

Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
A CASH INFLOW
1 Bank Loan of Land Purchase 6,500,000.00 6,500,000.00
2 Sales Projection 56,825,093.39
Total Cash Inflow 63,325,093.39 6,500,000.00 0.00 0.00 0.00 0.00 0.00 0.00 0.00
Cummulative Cash Inflow 6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00
B CASH OUTFLOW
1 Land Cost 6,738,187.50 6,738,187.50
2 Construction Cost 20,541,300.00
3 Repayment of Land Loan 6,500,000.00
Administrative Cost
4 Professional Fees 1,848,717.00
5 Administrative Fees 1,158,842.30
6 Plan Fees 328,000.00
7 Contributions & Fees 410,826.00
8 Advertising & Marketing 579,421.15
9 Conversion Premium :-
i) Commercial 162,000.00
ii) Residential 483,131.25
10 Subdivision 246,000.00
11 Legal Fees 410,000.00
12 Contingencies 1,027,065.00
Finance Cost
13 Bridging Finance 616,239.00
14 Financing Cost for Land 3,501,055.71 141,558.18 144,641.06 147,791.07 151,009.69 154,298.41 157,658.75 161,092.27 164,600.57
Total Cash Outflow 44,550,784.91 6,879,745.68 144,641.06 147,791.07 151,009.69 154,298.41 157,658.75 161,092.27 164,600.57
Cummulative Cash Outflow 6,879,745.68 7,024,386.73 7,172,177.81 7,323,187.50 7,477,485.91 7,635,144.66 7,796,236.93 7,960,837.50
Net Cash Flow 18,774,308.48 (379,745.68) (144,641.06) (147,791.07) (151,009.69) (154,298.41) (157,658.75) (161,092.27) (164,600.57)
Cummulative Cash Flow (144,641.06) (292,432.13) (443,441.82) (597,740.24) (755,398.99) (916,491.26) (1,081,091.82)
DescriptionItem
Amount
(RM)
20112010

A CASH INFLOW
1 Bank Loan of Land Purchase 6,500,000.00
Total Cash Inflow 63,325,093.39
Cummulative Cash Inflow
B CASH OUTFLOW
1 Land Cost 6,738,187.50
Administrative Cost
6 Plan Fees 328,000.00
11 Legal Fees 410,000.00
Finance Cost
14 Financing Cost for Land 3,501,055.71
Total Cash Outflow 44,550,784.91
Cummulative Cash Outflow
Net Cash Flow 18,774,308.48
Cummulative Cash Flow
DescriptionItem
Amount
(RM) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
2,004,502.50 1,879,435.25 3,746,633.00 7,565,379.09
0.00 0.00 0.00 0.00 2,004,502.50 1,879,435.25 3,746,633.00 7,565,379.09
6,500,000.00 6,500,000.00 6,500,000.00 6,500,000.00 8,504,502.50 10,383,937.75 14,130,570.75 21,695,949.84
1,386,537.75 2,002,776.75 2,332,904.79 4,346,685.80
1,109,230.20 369,743.40
144,855.29 144,855.29 144,855.29 144,855.29
328,000.00
410,826.00
72,427.64 72,427.64 72,427.64 72,427.64
162,000.00
483,131.25
246,000.00
410,000.00
128,383.13 128,383.13 128,383.13 128,383.13
77,029.88 77,029.88 77,029.88 77,029.88
168,185.27 171,848.04 175,590.58 179,414.62 183,321.94 187,314.36 191,393.73 195,561.93
168,185.27 171,848.04 175,590.58 179,414.62 5,141,743.07 2,612,787.04 2,946,994.44 5,334,687.07
8,129,022.77 8,300,870.81 8,476,461.38 8,655,876.00 13,797,619.07 16,410,406.12 19,357,400.56 24,692,087.63
(168,185.27) (171,848.04) (175,590.58) (179,414.62) (3,137,240.57) (733,351.79) 799,638.56 2,230,692.02
(1,249,277.09) (1,421,125.13) (1,596,715.71) (1,776,130.32) (4,913,370.90) (5,646,722.69) (4,847,084.13) (2,616,392.11)
20132012

A CASH INFLOW
B CASH OUTFLOW
1 Land Cost 6,738,187.50
Administrative Cost
6 Plan Fees 328,000.00
11 Legal Fees 410,000.00
Finance Cost
DescriptionItem
Amount
(RM) Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4
7,085,335.06 7,957,934.07 5,559,796.07 17,963,135.35 165,837.25 0.00 1,448,552.88 0.00
7,085,335.06 7,957,934.07 5,559,796.07 17,963,135.35 165,837.25 0.00 1,448,552.88 0.00
28,781,284.90 36,739,218.97 42,299,015.04 60,262,150.39 60,427,987.64 60,427,987.64 61,876,540.51 61,876,540.51
3,356,301.70 2,280,328.84 2,079,806.63 1,472,126.50 770,298.75
6,500,000.00
369,743.40
144,855.29 144,855.29 144,855.29 144,855.29
72,427.64 72,427.64 72,427.64 72,427.64
128,383.13 128,383.13 128,383.13 128,383.13
77,029.88 77,029.88 77,029.88 77,029.88
199,820.92 204,172.65 208,619.16 213,162.51
3,978,818.55 2,907,197.42 2,711,121.72 8,977,728.34 770,298.75 0.00 0.00 0.00
28,670,906.17 31,578,103.60 34,289,225.32 43,266,953.66 44,037,252.41 44,037,252.41 44,037,252.41 44,037,252.41
3,106,516.51 5,050,736.65 2,848,674.35 8,985,407.01 (604,461.50) 0.00 1,448,552.88 0.00
490,124.40 5,540,861.05 8,389,535.40 17,374,942.41 16,770,480.91 16,770,480.91 18,219,033.78 18,219,033.78
20152014

A CASH INFLOW
B CASH OUTFLOW
1 Land Cost 6,738,187.50
Administrative Cost
6 Plan Fees 328,000.00
11 Legal Fees 410,000.00
Finance Cost
DescriptionItem
Amount
(RM) Q1 Q2 Q3 Q4
0.00 0.00 0.00 1,448,552.88
0.00 0.00 0.00 1,448,552.88
61,876,540.51 61,876,540.51 61,876,540.51 63,325,093.39
513,532.50
0.00 513,532.50 0.00 0.00
44,037,252.41 44,550,784.91 44,550,784.91 44,550,784.91
0.00 (513,532.50) 0.00 1,448,552.88
18,219,033.78 17,705,501.28 17,705,501.28 19,154,054.16
2016

4.0 NPV
PV Factor
12% per annum
Q1 6,500,000.00 (6,879,745.68) (379,745.68) 0.9721 (369,150.77)
Q2 0.00 (144,641.06) (144,641.06) 0.9449 (136,671.33)
Q3 0.00 (147,791.07) (147,791.07) 0.9185 (135,746.10)
Q4 0.00 (151,009.69) (151,009.69) 0.8929 (134,836.56)
Q1 0.00 (154,298.41) (154,298.41) 0.8679 (133,915.59)
Q2 0.00 (157,658.75) (157,658.75) 0.8437 (133,016.69)
Q3 0.00 (161,092.27) (161,092.27) 0.8201 (132,111.77)
Q4 0.00 (164,600.57) (164,600.57) 0.7972 (131,219.57)
Q1 0.00 (168,185.27) (168,185.27) 0.7749 (130,326.76)
Q2 0.00 (171,848.04) (171,848.04) 0.7533 (129,453.13)
Q3 0.00 (175,590.58) (175,590.58) 0.7322 (128,567.42)
Q4 0.00 (179,414.62) (179,414.62) 0.7118 (127,707.33)
Q1 2,004,502.50 (5,141,743.07) (3,137,240.57) 0.6919 (2,170,656.75)
Q2 1,879,435.25 (2,612,787.04) (733,351.79) 0.6726 (493,252.42)
Q3 3,746,633.00 (2,946,994.44) 799,638.56 0.6538 522,803.69
Q4 7,565,379.09 (5,334,687.07) 2,230,692.02 0.6355 1,417,604.78
Q1 7,085,335.06 (3,978,818.55) 3,106,516.51 0.6178 1,919,205.90
Q2 7,957,934.07 (2,907,197.42) 5,050,736.65 0.6005 3,032,967.36
Q3 5,559,796.07 (2,711,121.72) 2,848,674.35 0.5837 1,662,771.22
Q4 17,963,135.35 (8,977,728.34) 8,985,407.01 0.5674 5,098,319.94
Q1 165,837.25 (770,298.75) (604,461.50) 0.5516 (333,420.97)
Q2 0.00 0.00 0.00 0.5362 0.00
Q3 1,448,552.88 0.00 1,448,552.88 0.5212 754,985.76
Q4 0.00 0.00 0.00 0.5066 0.00
Q1 0.00 0.00 0.00 0.4925 0.00
Q2 0.00 (513,532.50) (513,532.50) 0.4787 (245,828.01)
Q3 0.00 0.00 0.00 0.4653 0.00
Q4 1,448,552.88 0.00 1,448,552.88 0.4523 655,180.47
63,325,093.39 (44,550,784.91) 18,774,308.48 9,997,957.95
2016
Total Cash Flow
Quarter Cash Outflow (RM) Net Cash Flow (RM)
2013
2012
2015
2014
NPV (RM)Cash In Flow (RM)Year
2011
2010

4.1 Comment on the viability of the project
The NPV of this particular project was calculated as RM 9,997,957.95, which
is a positive value. This shows that there is a better return in the future with the
investor paying less than what the development is worth. Hence, the project is
considered viable.
21

5.0 Cash Flow based on a ‘Build-then-Sell’ Concept
The Build Then Sell (BTS) concept is a new concept introduced by the
Government in the year 2007 where housing developers have to complete a housing
project before selling houses to buyers. This is different from the current
conventional concept of Sell then Build (STB). Although developers are encouraged
to adopt the BTS concept, they have the option to continue with the conventional
STB method. But what are the differences do they have on cash flow between these
2 different concepts?
Only big players in the development industry can afford to use a BTS concept
due to the significant amount of capital required to build the entire project without
any financial aid from the consumers. Therefore, BTS cannot be applied to large
scaled project to lower the risk of abandonment of project in case it does not sell.
It will require huge shareholders’ funds and capital commitment if a housing
developer is unable to secure bank borrowings and banks will be reluctant to finance
a project under a BTS concept due to the nature of the risks involved. Previously
unknown developers will stand little chance of securing any project financing. Due
to the higher initial cost of funding by the employer, the BTS concept will eventually
shoot up the selling price of properties which is a con for house buyers.
The pros of having a BTS concept to a development cash flow is the
reduction of variation works which is a better cash flow system, this is due to all
units are still completely own by the developer and under their specifications.
Unoike STB system, at some point some owners will want to change materials being
used in their unit to their own specifications which will then increase the amount of
variation works and cash outflow to order specific materials for the owner.
22

The BTS concept has very low cash inflow from beginning until the
construction stage as compared to the STB. But the advantage of BTS is the price of
the development will always be higher after completion rather than sold before
construction due to the risk consumers does not have to bare and actually have a
physical approach to the finished product. This gives the BTS concept to have a
higher cash inflow as compared to STB but only can receive its inflow after the
construction stage which is a huge risk the developers have to take.
23

Reference
Online, T. S. (2015, October 18). Build then sell. Retrieved November 16, 2018,
from https://www.thestar.com.my/news/nation/2007/04/14/build-then-sell/
Posted on April 5, 2013 | 3803 views | Topic : Featured, Property News. (n.d.).
Fine-tuning the "build-then-sell" concept. Retrieved November 16, 2018, from
http://www.starproperty.my/index.php/articles/property-news/fine-tuning-buil
d-then-sell-concept/
Property development not ready for build-then-sell concept. (n.d.). Retrieved
November 16, 2018, from
https://www.edgeprop.my/content/property-development-not-ready-build-then
-sell-concept
Tong, D. A. (2015, October 12). Taking a closer look at the build-then-sell
concept. Retrieved November 16, 2018, from
https://www.thestar.com.my/business/business-news/2012/02/11/taking-a-clos
er-look-at-the-buildthensell-concept/
What has happened to 'Build Then Sell' concept, asks HBA. (2016, October 21).
Retrieved November 16, 2018, from
https://www.freemalaysiatoday.com/category/nation/2016/10/21/what-has-hap
pened-to-build-then-sell-concept-asks-hba/
24

Appendix
DEVELOPMENT ECONOMICS
ASSIGNMENT
MEETING 1
DATE : 24 October 2018 (Wednesday)
TIME : 3.00pm – 4.00pm
LOCATION : D8.06
ATTENDEES : 1. PANG KAI YUN
2. EVON WEE YEE JING
3. LEE ZHI XIN
4. LIM KAR YAN
5. SAM WEI YIN
6. SANDRABROOKE GOH
7. TERENCE TAN PENG ONG
8. WONG DE-VIN
DISCUSSION :
1. Pang Kai Yun is selected as the group leader.
2. Job is assigned equally among the group members as shown below:
Task Name Deadline
Question 1 LIM KAR YAN 31 October 2018 (Wednesday)
Question 2 SAM WEI YIN
SANDRABROOKE GOH
PANG KAI YUN
2 November 2018 (Friday)
Question 3 EVON WEE YEE JING
LEE ZHI XIN
TERENCE TAN PENG ONG
WONG DE-VIN
9 November 2018 (Friday)
Question 4 LIM KAR YAN 14 November 2018
(Wednesday)
Question 5 - 16 November 2018 (Friday)
3. Question 4 will start after Question 3 is done.
4. Question 5 will be assigned after Question 2 and 3 is done.
5. Next meeting will be held on 31 October 2018 (Wednesday). Time and location to be
confirmed.

ASSIGNMENT
MEETING 2
DATE : 2 November 2018 (Tuesday)
TIME : 10.30am – 11.30am
LOCATION : C7.04
3. LEE ZHI XIN
4. LIM KAR YAN
5. SAM WEI YIN
6. SANDRABROOKE GOH
8. WONG DE-VIN
DISCUSSION :
1. Question 1 is completed by LIM KAR YAN.
2. Question 2 is completed by SAM WEI YIN and SANDRABROOKE GOH.
3. Question 3 is still on going.
4. Question 4 will start after Question 3 is done. The NPV table is done.
5. Question 5 will be done by PANG KAI YUN.
6. Next meeting will be held on 14 November 2018 (Wednesday). Time and location to
be confirmed.

ASSIGNMENT
MEETING 3
DATE : 15 November 2018 (Thursday)
TIME : 11.00am – 11.30am
LOCATION : C7.02
3. LEE ZHI XIN
4. LIM KAR YAN
5. SAM WEI YIN
6. SANDRABROOKE GOH
8. WONG DE-VIN
DISCUSSION :
1. Question 5 will be done by WONG DE-VIN.
2. Revised on the job assigned as shown below:
Task Name Progress
Question 1 LIM KAR YAN Done
SANDRABROOKE GOH
Done
Question 3:
i) Cash Inflow
ii) Cash Outflow
iii) Quarter-Yearly
LEE ZHI XIN
EVON WEE YEE JING
On-going
Done
On-going
Question 4 LIM KAR YAN Table is done
Question 5 WONG DE-VIN On-going
Minutes of meeting,
checking & formatting
PANG KAI YUN On-going
3. List down all the question that want to clarify with Ms Tay and Pn Nurul.

ASSIGNMENT
MEETING 4
DATE : 23 November 2018 (Friday)
TIME : 10.30am – 11.30am
LOCATION : C7.02
ATTENDEES : 1. PANG KAI YUN,
3. LEE ZHI XIN
4. LIM KAR YAN
5. SAM WEI YIN
6. SANDRABROOKE GOH
8. WONG DE-VIN
DISCUSSION :
1. Check all the answer and format.
2. Progress of the assignment is shown as below:
Task Name Progress
SANDRABROOKE GOH
Done
Question 3:
i) Cash Inflow
ii) Cash Outflow
iii) Quarter-Yearly
LEE ZHI XIN
EVON WEE YEE JING
Done
Done
Done
Question 5 WONG DE-VIN Done
Minutes of meeting,
checking & formatting
PANG KAI YUN On-going

Assignment - Financial Appraisal

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