Case ID: 375376
Solution ID: 29
Words: 599
Price $ 75

Angus Cartwright IV Case Solution

Case Solution

Judy and John DeRight, hoping to enhance their investment portfolios, have held Angus Cartwright, Jr. to distinguish forthcoming land acquisitions. Mr. Cartwright has four potential properties that he feels justify an inside and out money related investigation. The case gives a chance to look at the different parts of land return- - income, tax cuts, and prospects - and measure the productivity of a proposed speculation through the estimation of net present quality, inside rate of return, and capitalization rate.

Excel Calculations

·         Ivy Terrace

·         Flower Building

·         Stony Walk

·         Cash Flow calculations

·         Facts of Stony Walks      

·         Amortization Schedule for Mortgage                                                                     

·         Depreciation schedule  

·         Discounted Cash Flow Analysis                                                                                                                                 

·         Cash Flow before Taxes                                                                                                                                                               

·         Income Tax Consequences                                                                                                                                         

·         NPV Analysis                                                                                                                                                                     

·         Breakdown of IRR                                                                                                                           

·         Alison Green

·         Projected Cash Flow

·         Net Operating Income

·         Net Operating Income

·         Taxable Income

·         BEFORE TAX CASH FLOW

·         AFTER TAX CASH FLOW

·         TOTAL RETURN

·         Purchase Price

·         Net Book Value

·         Land Value

·         Depreciable Base

·         Amortization Schedule (monthly payments--annualized)

·         Year end balance

·         Annual debt service

·         Amortization

·         Interest

·         Amortization Schedule

·         Ending Balance

·         Finance Charge

·         Interest Charge

·         Amortization

·         Analysis of Discounted Values

·         Cash Flow Before Taxes

·         Income Tax Consequences

·         Future Values

Questions Covered

Requirement 1: Excel Spreadsheet

- Complete Exhibits 1-10 for "Angus Cartwright IV Spreadsheet". Submit only the filled-out spreadsheet; 

  Use the “Spreadsheet Guidance” file to help arrive at the answers on the main spreadsheet. 

 -Assuming that you are the investment advisor Angus Cartwright IV, prepare a clear,  concise and convincing memorandum to either Judy DeRight or John DeRight  explaining which property (or properties) you feel would be the best investment  opportunity for either of these investors. Be sure to substantiate your recommendations based upon each individual's personal investment criteria and the financial characteristics of each of your recommended properties. Although you are being asked to submit written investment recommendations for only one of these investors, remember that you represent both of them and that each one is a very important client. During class discussion you will also be asked to explain your investment recommendations for each client. Your investment recommendation must be submitted at the beginning of class and must not exceed two double-spaced typed pages, exclusive of relevant exhibits. Be sure that your recommendation is written in a realistic, persuasive memorandum format. Include at the end of your memo a  paragraph for recommendations for the client you didn't address the memo toward In addition to your investment recommendation memo, prepare a one page practical memo that outlines and explains the “Next Steps” that should to be taken to further investigate the recommended project(s) and consummate the acquisition(s). 

From both learning and grading perspective, your investment recommendations are the most important component of the Angus Cartwright exercise. Sound and carefully argued investment recommendations will demonstrate that you not only understand the financial calculations but also can interpret the results and distinguish which measures of return are most meaningful.