Finance model

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timer Asked: Dec 11th, 2017

Question Description

Hi! I have this Finance Project that is due Monday night tomorrow and I don't have any time to focus on it. Is it possible to help me with it? I attached the instructions for it, please let me know what you think.
Cheers!

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The Sharing Economy / Uberization. The sharing economy has seen significant growth in dollar volume and product offerings over the last several years. Your job is to recommend an investment that utilizes an existing sharing economy platform. At the heart of the decision is a discounted cash flow model that evaluates the investment. For example, can you purchase a house, rent it on Airbnb, and generate a profit? Many assumptions will have to be made, as in all project evaluations, but I will look for thoroughness in the analysis and realistic assumptions. For example, in the Airbnb case, did you account for taxes, management fees, maintenance, etc. and have you provided a realistic example of the purchase price (for sale ad) and rental income (rental comparisons). Project Tips: (Airbnb) in San Jose, Ca 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. The project is an application of the capital budgeting concepts in Chapter 11. Chapter 11 is, again, simply a different use of TVM. Your job is to create a financial model of a sharing economy project. The project should consist of detailed report. Within this report you should summarize your financial model and give very detailed justification for every number used to compute your cash flows. For example, if you have chosen Airbnb, you should provide evidence of the cost of the house (e.g. Zillow) and all related expenses (e.g. taxes and insurance). It is not enough to say “I think that I can buy a 3 bed room house in Campbell for $1.2 million.” You need to provide evidence that this is possible. You may collect your evidence in an appendix at the end or your report. The financial model – discounted cash flows – should be clearly presented so that I can follow along with your model. You may do this by hand or in excel. You may consider preparing a pro-forma income statement(s) for the project to estimate the profit, and cash flows, for the project. When you calculate the net present value of the project, please explain and justify the discount rates used. The write up should be clearly written and free of grammatical and other errors. Approximately 20% of your mark will be based on clarity, sentence structure, grammar, etc. Please have your assignment edited before submission. While reading the project I will ask myself: have you taken into account ALL revenues and expenses? Have you provided evidence of revenue and expenses? Are your other assumptions reasonable? You should provide a recommendation at the end of the project as to whether or not the project is worthwhile. Note: you don’t have to recommend the project. If the NPV is less than zero, that’s fine.
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