A Study on Financial Possibility of 45 Mansion Improvement and Development Project

Abstract

This independent study aims to study financial possibility of 45 Mansion Improvement and Development Project in order to utilize the obtained results as the data for making decision on project investment. The methodology of this study was collecting data (including data of nearby rental accommodation business survey, evaluation of building improvement cost, occupancy rate and cost of maintenance) for evaluating the project and calculating the project’s capital as well as predicting occupancy rate by using time series analysis through Simple Exponential Smoothing for estimating annual returns and additional net cash flow per year. Subsequently, the obtained data was utilized for analyzing financial possibility of the project by evaluating financial project value. It was found that this project was possible and worth for investment under normal condition because the current net value of the project was 416,030.79 baht that was positive value. The rate of return obtained from investing in the project was 6.88% that was more than the cost of project’s capital with the value of 5.36%. For evaluating financial project value under risk condition by using sensitivity analysis, it was found that the project had a risk on changing of additional rental fee rate and occupancy rate.