Assignment Task

analysis to better understand your financing position. The following questions must be d in chronological order. All workings are to be completed in the excel document provided. Upload your workings (in excel format).
You forecast the development costs to be $7.35m over a 24-month period. Current borrowing rates are 6.25% per annum and your interest charges will capitalize on your construction loan. Escalation to be compounded monthly.

• Assuming a straight-line method for construction costs, what is the total interest paya for the project? 
• The s-curve provided, reforecast your construction cashflow. What is the total interes payable?
• Comment on the difference between the interest charges in Tasks (a) and (b). What do this suggest about your cost forecasting and cashflow? 
• You are reforecasting your expenses. You expect the planning period to last 6 months. followed by an 18-month construction period. You estimate planning costs to total $675,000. Assume that you escalate your construction expenses to the start of construction at a rate of 12.5% p.a. Build out the cashflows for the development show soft costs, hard costs and the interest draw down.
• Recalculate the interest charges for the development (from scenario d) based on a new interest rate of 8.75%.