From the course: Real Estate Analysis Foundations

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Which measure to use? Part 2

Which measure to use? Part 2 - Microsoft Excel Tutorial

From the course: Real Estate Analysis Foundations

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Which measure to use? Part 2

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- Hey guys, let's look at the examples we visited earlier. Again, the eight investments where we're making two hundred dollars of an investment and then we're getting a total of one thousand dollars back over a ten year period. But, the difference here is each one of the investments, the one thousand dollars, come in different amounts, in different times. So, some of them are spread out more and some are spread less and had only come in in two years. So, with those, we remember we saw that Investment 5 was the best option. It was the most efficient at returning the investment to the investor. And when we look at the other measures, the Net Present Value, at a discount rate of eight percent, we see that the NPV is consistent with the IRR here in this case. That is the most efficient at returning that capital. Now, when we look at the Cash Multiple, they all look exactly the same. That was by design, right, because you're getting the same amount of total cash back, one thousand dollars…

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