Sensitivity Analysis: Pinkney street case
Instructions
- Please attempt to answer the following questions in your Case Analysis:
- How would you evaluate the Pinckney Street property? What are the risks and rewards?
- Identify and discuss some of the alternative financing options and strategies Lee can employ in purchasing this property.
- Describe Lee’s qualitative analysis and search methodology. How did he attempt to find an investment property? Who aided him in his search? What were the strengths and weaknesses of his search method?
- What do the numbers look like? Discuss Lee’s quantitative analysis, including his sources and uses of funds and his return projections.
- Please perform some sensitivity analyses based on the information given. What data points are particularly sensitive to the overall attractiveness of the deal (i.e. rents, mortgage amount, renovation costs, operating expenses, etc)? A sensitivity analysis must be included.
- What are the primary risks for Lee with this property? What are some of the problems he may experience?
Answer Preview
Technological advancements such as the Internet, smart gadgets, and the Internet of things have offered many opportunities and benefits for the hospitality sector. The Internet, in particular, has enabled hospitality businesses to perform many tasks such as booking, payment processing, reservations, and communication more easily, competitively, and cost-effectively (Mupfiga, 2015). However, these benefits come with their share of risks, which are inescapable in the hospitality industry.
Length: 1000 Words