GoTranscript Audio Test Answers 16 May 2021

                 

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Speaker 1:

This is the test we’re using today for GoTranscript.

Speaker 2:

Alright, let's quiet down to adult roar, shall we? That's better. Now, what we want to do is calculate our unleveraged cash flow. We've- we've done this on a few other projects, but this one's just going to be a little bit different. We'll have four lines, which are development costs, property, cash flow, disposition proceeds and unlevered cash flow. For development costs. Let's, let's link to this construction debt tab. See that number there that says $7,000? Be sure to subtract the financing. Because those wouldn't apply in an unleveraged scenario. Why? Well, none of your beeswax kid, high finance, like this isn't any of your concern. Anyway, next we go to property cash flow. Here, we want to accomplish a few things. First, we only want to hold the noi during the hold period. Second, we only want to pull down positive noi, which is kind of like counting positive karma. You know, you get what you give, holy and finance, you should get back more than you give or else you're just treading water.

Speaker 2:

I mean, if you start with 3000 bucks and end up with 1500, probably not doing too well are you remember, we've already accounted for that negative Nelly and ally in the development costs. See this figure here, it's 1500 bucks. Let's write an FM formula, shall we? If the project month is less than or equal to the sale month, and the noi is positive, return the noi from the noi line. If that's false, put zero and then carry that formula across, then the disposition proceeds are pretty simple. Just write a formula that says, if the project month is equal to the sale month, return the net sale proceeds from the Summary tab. And if that's false, put zero and carry that formula across the across then sum up the net unlevered cash flow line. And we can proceed to calculating the return metrics. Let's jump down to this little box that I've already made. And input IRR, peak equity profit and multiple, the basic form for the IRR, we can just use the x IRR function. This one's pretty easy. We've done it a few times, then for the peak equity, we can just use a sum IF function that sums up all of the negative cash flows in the net unlevered cash flow row. And then for profit, we're going to use a similar Summa if some excuse me some IF function summing up all the positive cash flows in this row.

Speaker 2:

And then we're going to subtract the peak equity from it. Finally, for the multiple just take the profit divided by the peak equity. Now, let's roll through this one more time to make sure it makes sense. What was that amount again? 1500 bucks. Okay, you can see here that we are spending all that dough to develop the project in this period, then the project starts operating in the month of November, and we are just funding that negative noi. After that the noi breaks even and we start to produce a positive cash flow. Then we sell the property later down the road this in this month, maybe for 7500 bucks. There we have it we have the unlevered returns calculator. Let's make the quick return summary box on the Summary tab and list these links these metrics to that tab. 

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This is the test we’re using today for GoTranscript.

GoTranscript test answers 16 May 2021

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