1. DownEast Tourist Mall Ryan Dresher Ashley Moss
Southwestern College-MGMT 565
Instructor-Mohamed Elaoudiy

2. Agenda Background Possible Project-DownEast Tourist Mall
Project Evaluation
Risk Evaluation
Conclusion

3. Background Waldo County DownEast Tourist Mall
Well known real estate developer
Known for picking good locations
Needs evaluation of new tourist mall project
DownEast Tourist Mall
Objective: intercept the many tourists heading downeast toward Maine.
$90 million investment

4. DownEast Tourist Mall Capital Outlay--$90 million
Construction --3 years w/15 year life
Income
Annual rent from retailers--$12m
5% of each tenants gross sales--$24m
Cost of Capital –9%

5. (Brealey, Myers & Allen, 2011)
4/24/2017
Project Evaluation
(Brealey, Myers & Allen, 2011)

6. Project Evaluation

7. Risks Retail Sales Slump Rental Sales Slump High Construction Costs
Delayed Construction
Inflation

8. Sensitivity Analysis

9. Risk Scenario Analysis

10. Risk Contingency and Response

11. Conclusion NPV and IRR suggest going forward Low risk of negative NPV
Income would have to dip 30% in all years to cause negative NPV
6.5 year payback
Recommendation to move forward

12. References
Brealey, R. A., Myers, S. C., & Allen, F. (2011). Principles of corporate finance. (10 ed.). New York, NY: McGraw-Hill.