Business Case
An investor is considering the purchase of one to three:
condominiums in the tropical paradise of Costa Rica. The investor has no intention of using the condo for her personal use and is only concerned with the income producing capability that it will produce. After some discussion with a long time and real estate savvy resident of Costa Rica, the investor decides to perform a simple analysis of the operating profit/loss based on the following information:
| Variable property | A | B | C |
| Cost | Based on: Most likely monthly occupancy of 20 day 12 months per year operation2000 Colones per occupancy day cost | Based on: Most likely monthly occupancy of 25 day 12 months per year operation1000 Colones per occupancy day cost | Based on: Most likely monthly occupancy of 15 day 10 months per year operation3500 Colones per occupancy day cost |
| Fixed property cost | 3,000,000 | 2,500,000 | 4,500,000 |
| Daily revenue | 33,800 | 26,000 | 78,000 |
- All Cost and Revenues in Colones–520 Costa Rican Colones/US Dollar
- Additionally, the exchange rate may vary 15%, and the most likely occupancy days can vary from a low and high of 15–25, 20–30, and 10–20 for A, B, and C, respectively. Based on this information, create a workbook that determines the best case, most likely, and worse case annual cash flows for each of the properties.
source: Excel Data Analysis Modeling and Simulation (Hector Guerrero)- p19-20