Discuss which of these appraisal methods IS the most suitable for this task and advise which of the two proposed schemes is the best.

Development decision making (1200 words)

You are required to propose a choice of two (2) housing schemes on the site for MF4BE to pick from. Decide on the total number of residential dwellings proposed for this site and the housing mix and types (e.g. 1 bedroom, 2 bedrooms etc). Note: a minimum of FOUR (4) house types is required for both proposed schemes. a. Undertake breakeven analyses (charts included) based on only the development of houses in both of the proposed schemes. Based on the breakeven analyses, advise MF4BE on which of the two schemes is the best. Market information can be gleaned from a variety of databases e.g. “Rightmove” that will provide reasonable comparables. Cost information can be obtained from sources such as the Building Cost Information Service (BCIS) or Spon’s. (18 marks) b. With the use of the information from (a) above, advise MF4BE on the viability of the two proposed schemes by carrying out capital budgeting using the Return of Capital Employed (ROCE), Payback Period (PP), Net Present Value (NPV) and Internal Rate of Return (IRR). Discuss which of these appraisal methods IS the most suitable for this task and advise which of the two proposed schemes is the best. Make appropriate assumptions regarding the timing of the construction and sale of the units. (22 marks) Managerial Finance for the Built Environment 2021-22 Page | 4 of 6 The full report should include, among other things: • One-page executive summary of both Part 1 and Part 2- containing the key features and results of the report. This should be on a separate page placed at the beginning of the report • A brief introductory section • Numerical investigation • Findings – analysis and interpretation of results • Solutions, conclusions and recommendations • References (ensure that you use the Harvard System check the UWE library website for guidance) • Appendices – these should be used appropriately to show the workings (Calculations for Part 2 should be done in MS Excel) and should be limited to information supporting the report. Definitions of ratios should be within the report while ensuring that important information is not relegated to the appendices