R15L111 - AREF Valuation Report
If you want to generate financial information, such as the net present value (NPV) or internal rate of return (IRR), you must complete the information on the NPV and IRR tabs of the building constants record and run the AREF Valuation Report (R15L111).
You use processing options to specify the revision number to use to retrieve the information from the building constant record, the beginning fiscal year to use, and the number of years to generate cash flow information.
This table lists the type of financial information that the report generates and the formula that the system uses:
Financial Information |
Formula Used |
|---|---|
Cash flow |
(Revenue) – (expenses, including capital expenditures) |
Stabilized NOI amount |
(The year for stabilized NOI cash flow amount) –(any capital expenditure amounts) |
Selling price |
(Stabilized NOI Amount) / (Cap Rate Percent) |
Selling cost amount |
(Selling price) × (selling cost percent) |
Net proceeds from sale |
(Selling price) × [1 – (selling cost percent)] |
NPV (net present value) |
NPV = CFt/l+kt-IPP CF = cash flow k = discount rate t = time period IPP = initial purchase price |
IRR (internal rate of return) |
CFt/l+rt-IPP=0 CF = cash flow r = internal rate of return t = time period IPP = initial purchase price |