9 Questions
What happens to real estate values when cap rates go down?
They go up
What happens to the levered IRR of a deal when cap rates go down?
It goes up
What does a one-sided sensitivity table test?
The impact of changing one assumption on the model's multiple outputs
What does a two-sided sensitivity table test?
The impact of varying two key assumptions in a deal at any given time
What does the gray line in a sensitivity table represent?
Base case assumptions
What is being tested in a one-sided sensitivity table?
One assumption variable on outputs of the model
What is being tested in a two-sided sensitivity table?
The impact of changing two assumptions on the model's single output
Where should sensitivity tables be built in a cash flow model?
On the same page as assumptions
What does the gray line represent in the sensitivity table according to the text?
Base case
Learn about sensitivity tables in this short video, where we discuss the two types and walk you through a completed discounted cash flow model. Download the model and gain valuable insights into real estate DCF analysis.
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