Explain the identified changes to the suppliers in such a way that they will understand.

According to the textbook, ongoing challenges in the global business environment are mostly attributed to unethical business practices, failure to embrace technology advancements, and stiff competition among businesses. Imagine that you have been appointed as Apple’s Chief Compliance Officer and must prepare a video presentation for Apple’s suppliers regarding Apple’s Supplier Code of Conduct to deliver via a web meeting. To prepare for your presentation, review Apple’s Supplier Code of Conduct, located at https://www.apple.com/supplier-responsibility/. Next, use a tablet, smartphone, laptop, desktop, or traditional video recorder to record a maximum of a five to seven (5-7) minute dynamic video on Apple’s Code of Conduct. Alternatively, you may submit a four to six (4-6) page paper instead of the video submission.

In addition to the recorded video, you must also create a presentation using PowerPoint (or other equivalent software) summarizing the important changes and explanations regarding the code of conduct that you communicated in your video presentation to email to the suppliers after the meeting for future reference.

You must submit both parts of the assignment to receive full credit.

Note: If you are using a tablet or smartphone you will need to email the video file to yourself, then save it to a computer in order to upload to Blackboard. You may want to upload your video to a file sharing service, such as Dropbox, if your email will not let you send a large video file. Dropbox is accessible from all smartphones and tablets from the Dropbox app.

Once you are ready to upload your video to Blackboard, view the Kaltura video tutorial found in your online course shell (Week 9).

Please use the following naming convention in the popup window for your video once it is finished uploading:

  • Title: Your First Name, Your Last Name – Challenges in the Business Environment
  • Tags: BUS475, Business Environment
  • Description: First Name, Last Name – BUS475 Assignment 2 (Date Uploaded ex. 11-14-2014)

Part 1: Video Presentation OR Paper

Prepare and present a video that is a maximum of five to seven (5-7) minutes OR write a four to six (4-6) page paper in which you:

  1. List specific changes that Apple has made to its Code of Conduct in recent years. Provide at least one (1) example of each change.
  2. Explain the identified changes to the suppliers in such a way that they will understand.

Describe, compare, and apply the ethical theories and perspectives to the topics.

Choose one of the ethical issues from the list below to research and write about. It is recommended that you choose a topic you are familiar with or have thought about previously. For example, you might choose an issue that either worries you or enrages you; you might choose one that you have worked on; or you might choose one that relates to recent events in your community.

Possible Issues

Corporate executive compensation

Corporate contributions to political campaigns

Affirmative action

The media and its responsibilities

Domestic surveillance

Whistle blowing in government or in a business

Religion in the workplace

Pornography

Consumer tracking

Ethical problems of gambling

Progressive taxation rates

Immigration

Women’s equality

In your paper, you will apply the ethical theories and perspectives to the issue you select. You do not have to use all six, but you should apply at least two ethical theories and at least one ethical perspective in your paper.

Make sure you write primarily on ethical topics and concepts; do not get distracted by doing analyses that apply political, economic, religious, or legal perspectives.

Describe, compare, and apply the ethical theories and perspectives to the topics. Explain how the theories and perspectives would analyze the issue.

What are the ethical issues?

Where are there breaches of ethical behavior?

How could each theory help people think about what would constitute virtuous or ethical behavior?

The paper must be five to seven pages in length (excluding title and references pages) and formatted according to APA style. You must use at least five scholarly source

Summarize the recommendations or improvements you would make to your project schedule.

Due Week 3 and worth 150 points

You have been selected to be the project manager (for a project of your choice). The project you choose here will be used again in Assignment 4 (Week 6) and you may be asked to reference this project in subsequent weekly discussions. The project that you decide to use should meet the key criteria of a project, such as (a) having a beginning and an end; (b) results in something being delivered to someone; (c) requires a series of activities that must be done to complete the project; and (d) requires resources (e.g, people, materials) to complete the work. The project can be one of a personal or professional nature.

Write a two to three (2-3) page paper in which you define the scope of your chosen project. In your paper you must:

Provide a brief summary of your chosen project.
Describe at least three (3) project goals and three (3) project objectives.
Identify the key customer(s) and at least two (2) stakeholders for your project. Remember, you are delivering the project to your customer(s); however, there are others (stakeholders) who have a vested interest in your project.
Describe at least three (3) key milestones and /or deliverables for your project.
Describe a high-level timeline that includes key tasks and deadlines.
Estimate the project’s overall cost and any key staffing and non-staffing resources needed.
Examine your project’s greatest challenge and provide a recommendation for addressing the challenge in question.
Format your assignment according to the following formatting requirements:

Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.

Project Schedule

Due Week 6 and worth 150 points

This assignment consists of two (2) parts: a project schedule, and a written response. You must submit both parts as separate files for the completion of this assignment. Label each file name according to the part of the assignment it is written for.

Part A: Project Schedule

(Submit as one [1] Microsoft Project file)

In Assignment 2, you developed a project plan. Now, using the information from your project proposal, create a multi-level work breakdown structure (WBS) and detailed project schedule.

Your project must include the following criteria:
The project must consist of at least twenty-five (25) tasks.
Each task must contain a start date, a finish date, and have main staffing and non-staffing resources assigned.
Assume that your work activities are completed during normal weekdays (no weekend work) under normal conditions (8 hours per day).
In terms of holidays, you can assume no work will be done the following days: New Year’s Day, President’s Day, Good Friday, Good Monday, Friday before Memorial Day, Memorial Day, the business day before Independence Day, Independence Day, the Friday before Labor Day, Labor Day, the day before Thanksgiving Day, Thanksgiving Day, Black Friday (day after Thanksgiving), the business day before Christmas, Christmas Day, the business day after Christmas Day, and New Year’s Eve.

Part B: Written Response

(Submit as a Microsoft Word file)

Write a one to two (1-2) page response in which you:

Analyze your project in terms of project completion, critical path, and slack / float. Specifically, be sure to answer the following:
When will the project be completed?
What is the critical path for the project?
How much slack / float is in your project? What activities have the greatest slack / float?
Summarize the recommendations or improvements you would make to your project schedule. Specifically, be sure to answer the following:
Identify the top three (3) activities that you believe could impact the project completion date.
What additional activities would you add to this project to make it more complete, from a project management viewpoint?
Format your assignment according to the following formatting requirements:
Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.

What additional activities would you add to this project to make it more complete, from a project management viewpoint?

Due Week 3 and worth 150 points

You have been selected to be the project manager (for a project of your choice). The project you choose here will be used again in Assignment 4 (Week 6) and you may be asked to reference this project in subsequent weekly discussions. The project that you decide to use should meet the key criteria of a project, such as (a) having a beginning and an end; (b) results in something being delivered to someone; (c) requires a series of activities that must be done to complete the project; and (d) requires resources (e.g, people, materials) to complete the work. The project can be one of a personal or professional nature.

Write a two to three (2-3) page paper in which you define the scope of your chosen project. In your paper you must:

Provide a brief summary of your chosen project.
Describe at least three (3) project goals and three (3) project objectives.
Identify the key customer(s) and at least two (2) stakeholders for your project. Remember, you are delivering the project to your customer(s); however, there are others (stakeholders) who have a vested interest in your project.
Describe at least three (3) key milestones and /or deliverables for your project.
Describe a high-level timeline that includes key tasks and deadlines.
Estimate the project’s overall cost and any key staffing and non-staffing resources needed.
Examine your project’s greatest challenge and provide a recommendation for addressing the challenge in question.
Format your assignment according to the following formatting requirements:

Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.

Project Schedule

Due Week 6 and worth 150 points

This assignment consists of two (2) parts: a project schedule, and a written response. You must submit both parts as separate files for the completion of this assignment. Label each file name according to the part of the assignment it is written for.

Part A: Project Schedule

(Submit as one [1] Microsoft Project file)

In Assignment 2, you developed a project plan. Now, using the information from your project proposal, create a multi-level work breakdown structure (WBS) and detailed project schedule.

Your project must include the following criteria:
The project must consist of at least twenty-five (25) tasks.
Each task must contain a start date, a finish date, and have main staffing and non-staffing resources assigned.
Assume that your work activities are completed during normal weekdays (no weekend work) under normal conditions (8 hours per day).
In terms of holidays, you can assume no work will be done the following days: New Year’s Day, President’s Day, Good Friday, Good Monday, Friday before Memorial Day, Memorial Day, the business day before Independence Day, Independence Day, the Friday before Labor Day, Labor Day, the day before Thanksgiving Day, Thanksgiving Day, Black Friday (day after Thanksgiving), the business day before Christmas, Christmas Day, the business day after Christmas Day, and New Year’s Eve.

Part B: Written Response

(Submit as a Microsoft Word file)

Write a one to two (1-2) page response in which you:

Analyze your project in terms of project completion, critical path, and slack / float. Specifically, be sure to answer the following:
When will the project be completed?
What is the critical path for the project?
How much slack / float is in your project? What activities have the greatest slack / float?
Summarize the recommendations or improvements you would make to your project schedule. Specifically, be sure to answer the following:
Identify the top three (3) activities that you believe could impact the project completion date.
What additional activities would you add to this project to make it more complete, from a project management viewpoint?
Format your assignment according to the following formatting requirements:
Typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides.
Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page is not included in the required page length.

How could each theory help people think about what would constitute virtuous or ethical behavior?

Choose one of the ethical issues from the list below to research and write about. It is recommended that you choose a topic you are familiar with or have thought about previously. For example, you might choose an issue that either worries you or enrages you; you might choose one that you have worked on; or you might choose one that relates to recent events in your community.

Possible Issues

Corporate executive compensation

Corporate contributions to political campaigns

Affirmative action

The media and its responsibilities

Domestic surveillance

Whistle blowing in government or in a business

Religion in the workplace

Pornography

Consumer tracking

Ethical problems of gambling

Progressive taxation rates

Immigration

Women’s equality

In your paper, you will apply the ethical theories and perspectives to the issue you select. You do not have to use all six, but you should apply at least two ethical theories and at least one ethical perspective in your paper.

Make sure you write primarily on ethical topics and concepts; do not get distracted by doing analyses that apply political, economic, religious, or legal perspectives.

Describe, compare, and apply the ethical theories and perspectives to the topics. Explain how the theories and perspectives would analyze the issue.

What are the ethical issues?

Where are there breaches of ethical behavior?

How could each theory help people think about what would constitute virtuous or ethical behavior?

The paper must be five to seven pages in length (excluding title and references pages) and formatted according to APA style. You must use at least five scholarly sources

How long have you been having headaches?

By Monday, December 7, 2015 complete the assignment presented below.

During the first week of class you conducted your first practice interview, and in week three you developed an Interview Guide. For this activity, you will be using your Interview Guide, the analysis of potential interview biases from LASA 1, and the feedback you have received from your instructor to conduct an interview with a volunteer.

Prior to the Interview

    1. Locate an adult volunteer.
    2. Read the analysis requirements below and ENSURE you meet them within your interview. Make sure your interview includes:
      1. A minimum of 5 open and 5 closed ended questions (10 total).
      2. A minimum of 5 examples of paraphrasing, summaries, or reflections techniques (must have at least one of each paraphrase, summary, and reflection/5 total).

 

  1. Gather Recording Equipment (video is preferred).  You will need to record your interview.
  2. Also make sure you have a watch or a timer to keep track of the length of your interview. Make sure your interview is not less than 5 minutes long.

The Interview

  1. Needs to be at least 5 minutes long, but it should not be more than 10 minutes.
  2. Be prepared! Although it may not sound like it, 5 minutes is a long time in interviewing time. If you are having problems filling 5 minutes, go back to the interview skills you have learned about (e.g., probing, reflections, and summaries).

After the Interview

    1. Play back the recording of the interview.
    2. Transcribe or write out the interview completely. Be sure to write out everythingsaid during the interview
    3. After you have written the transcript of the interview, provide a detailed analysis of the interview. On your transcript:
      1. Identify Questions Used: On your transcript identify at least 5 closed and 5 open ended questions that you used during the interview. Identify these on your transcript using all caps (10 questions total).

        For example:

        Interviewer:  How long have you been having headaches?  CLOSED QUESTION

 

      1. Evaluate the Questions: After you have identified examples of 5 open and 5 open questions in your transcript, write an evaluation of the effectiveness of your use of questions (Approximately one paragraph for this analysis). Explain whether or not your questions were effective. How did your client respond to your questions? How would you improve the effectiveness of your questions?
      2. Identify Techniques Used: Next, identify at least 5 examples of paraphrasing, summarizing, or reflections you used (must have at least one of each: paraphrase, summary, and reflection). Again, use all caps on your transcript to identify each technique.

        For example:

        Interviewer: So it’s been several weeks since you’ve been able to sleep without problems? PARAPHRASE

 

      1. Evaluate the Techniques: Evaluate the effectiveness of your interview technique (Approximately one paragraph for this entire section). How did your client respond to the techniques in the interview? How do you know if you were effective with these? Provide justification for your response. How could you improve your use of these?

 

  1. Application: Analysis and Summary
    1. Explain how the information you gathered during the interview can aid in planning treatment for your client. How can treatment of this client be more informed or more targeted based on the information you gathered (Approximately 2-3 paragraphs).
    2. Identify at least two possible ethical issues that could arise during your interview (hint: go back to your Module 1 lecture for ideas about ethical issues in interviewing).  Explain how an ethical interviewer should deal with each of these issues. (Approximately 2-3 paragraphs).
Assignment 1 Grading Criteria
Maximum Points
Conducted interview and utilized the questions/techniques for an in-depth interview.
60
Transcribed interview completely. Identified the questions and techniques used.
16
Evaluated the open and closed ended questions used during the interview. Analyzed the effectiveness of the questions and how the patient responded. Suggested ways to improve the effectiveness of the questions.
40
Evaluated at least five interviewing techniques (at least one of each: paraphrase, summary, and reflection). Analyzed the effectiveness of the technique, and how the patient responded. Suggested ways to improve the effectiveness of the techniques.
40
Explained how the information gathered during the interview can aid in treatment planning for the client.
40
Identified at least two possible ethical issues that could arise during the interview. Explained how an ethical interviewer would deal with each of these issues.
40
Organization (16 points): Introduction, transitions, and conclusion

Style (8 points): Tone, audience, and word choice

Usage and Mechanics (16 points): Grammar, spelling, and sentence structure

APA Elements (24 points): In text citations and references, paraphrasing, and appropriate use of quotations and other elements of style

64
Total:
300

 

Explain how the information you gathered during the interview can aid in planning treatment for your client.

By Monday, December 7, 2015 complete the assignment presented below.

During the first week of class you conducted your first practice interview, and in week three you developed an Interview Guide. For this activity, you will be using your Interview Guide, the analysis of potential interview biases from LASA 1, and the feedback you have received from your instructor to conduct an interview with a volunteer.

Prior to the Interview

    1. Locate an adult volunteer.
    2. Read the analysis requirements below and ENSURE you meet them within your interview. Make sure your interview includes:
      1. A minimum of 5 open and 5 closed ended questions (10 total).
      2. A minimum of 5 examples of paraphrasing, summaries, or reflections techniques (must have at least one of each paraphrase, summary, and reflection/5 total).

 

  1. Gather Recording Equipment (video is preferred).  You will need to record your interview.
  2. Also make sure you have a watch or a timer to keep track of the length of your interview. Make sure your interview is not less than 5 minutes long.

The Interview

  1. Needs to be at least 5 minutes long, but it should not be more than 10 minutes.
  2. Be prepared! Although it may not sound like it, 5 minutes is a long time in interviewing time. If you are having problems filling 5 minutes, go back to the interview skills you have learned about (e.g., probing, reflections, and summaries).

After the Interview

    1. Play back the recording of the interview.
    2. Transcribe or write out the interview completely. Be sure to write out everythingsaid during the interview
    3. After you have written the transcript of the interview, provide a detailed analysis of the interview. On your transcript:
      1. Identify Questions Used: On your transcript identify at least 5 closed and 5 open ended questions that you used during the interview. Identify these on your transcript using all caps (10 questions total).

        For example:

        Interviewer:  How long have you been having headaches?  CLOSED QUESTION

 

      1. Evaluate the Questions: After you have identified examples of 5 open and 5 open questions in your transcript, write an evaluation of the effectiveness of your use of questions (Approximately one paragraph for this analysis). Explain whether or not your questions were effective. How did your client respond to your questions? How would you improve the effectiveness of your questions?
      2. Identify Techniques Used: Next, identify at least 5 examples of paraphrasing, summarizing, or reflections you used (must have at least one of each: paraphrase, summary, and reflection). Again, use all caps on your transcript to identify each technique.

        For example:

        Interviewer: So it’s been several weeks since you’ve been able to sleep without problems? PARAPHRASE

 

      1. Evaluate the Techniques: Evaluate the effectiveness of your interview technique (Approximately one paragraph for this entire section). How did your client respond to the techniques in the interview? How do you know if you were effective with these? Provide justification for your response. How could you improve your use of these?

 

  1. Application: Analysis and Summary
    1. Explain how the information you gathered during the interview can aid in planning treatment for your client. How can treatment of this client be more informed or more targeted based on the information you gathered (Approximately 2-3 paragraphs).
    2. Identify at least two possible ethical issues that could arise during your interview (hint: go back to your Module 1 lecture for ideas about ethical issues in interviewing).  Explain how an ethical interviewer should deal with each of these issues. (Approximately 2-3 paragraphs).
Assignment 1 Grading Criteria
Maximum Points
Conducted interview and utilized the questions/techniques for an in-depth interview.
60
Transcribed interview completely. Identified the questions and techniques used.
16
Evaluated the open and closed ended questions used during the interview. Analyzed the effectiveness of the questions and how the patient responded. Suggested ways to improve the effectiveness of the questions.
40
Evaluated at least five interviewing techniques (at least one of each: paraphrase, summary, and reflection). Analyzed the effectiveness of the technique, and how the patient responded. Suggested ways to improve the effectiveness of the techniques.
40
Explained how the information gathered during the interview can aid in treatment planning for the client.
40
Identified at least two possible ethical issues that could arise during the interview. Explained how an ethical interviewer would deal with each of these issues.
40
Organization (16 points): Introduction, transitions, and conclusion

Style (8 points): Tone, audience, and word choice

Usage and Mechanics (16 points): Grammar, spelling, and sentence structure

APA Elements (24 points): In text citations and references, paraphrasing, and appropriate use of quotations and other elements of style

64
Total:
300

 

How do you know if you were effective with these? Provide justification for your response. How could you improve your use of these?

By Monday, December 7, 2015 complete the assignment presented below.

During the first week of class you conducted your first practice interview, and in week three you developed an Interview Guide. For this activity, you will be using your Interview Guide, the analysis of potential interview biases from LASA 1, and the feedback you have received from your instructor to conduct an interview with a volunteer.

Prior to the Interview

    1. Locate an adult volunteer.
    2. Read the analysis requirements below and ENSURE you meet them within your interview. Make sure your interview includes:
      1. A minimum of 5 open and 5 closed ended questions (10 total).
      2. A minimum of 5 examples of paraphrasing, summaries, or reflections techniques (must have at least one of each paraphrase, summary, and reflection/5 total).

 

  1. Gather Recording Equipment (video is preferred).  You will need to record your interview.
  2. Also make sure you have a watch or a timer to keep track of the length of your interview. Make sure your interview is not less than 5 minutes long.

The Interview

  1. Needs to be at least 5 minutes long, but it should not be more than 10 minutes.
  2. Be prepared! Although it may not sound like it, 5 minutes is a long time in interviewing time. If you are having problems filling 5 minutes, go back to the interview skills you have learned about (e.g., probing, reflections, and summaries).

After the Interview

    1. Play back the recording of the interview.
    2. Transcribe or write out the interview completely. Be sure to write out everythingsaid during the interview
    3. After you have written the transcript of the interview, provide a detailed analysis of the interview. On your transcript:
      1. Identify Questions Used: On your transcript identify at least 5 closed and 5 open ended questions that you used during the interview. Identify these on your transcript using all caps (10 questions total).

        For example:

        Interviewer:  How long have you been having headaches?  CLOSED QUESTION

 

      1. Evaluate the Questions: After you have identified examples of 5 open and 5 open questions in your transcript, write an evaluation of the effectiveness of your use of questions (Approximately one paragraph for this analysis). Explain whether or not your questions were effective. How did your client respond to your questions? How would you improve the effectiveness of your questions?
      2. Identify Techniques Used: Next, identify at least 5 examples of paraphrasing, summarizing, or reflections you used (must have at least one of each: paraphrase, summary, and reflection). Again, use all caps on your transcript to identify each technique.

        For example:

        Interviewer: So it’s been several weeks since you’ve been able to sleep without problems? PARAPHRASE

 

      1. Evaluate the Techniques: Evaluate the effectiveness of your interview technique (Approximately one paragraph for this entire section). How did your client respond to the techniques in the interview? How do you know if you were effective with these? Provide justification for your response. How could you improve your use of these?

 

  1. Application: Analysis and Summary
    1. Explain how the information you gathered during the interview can aid in planning treatment for your client. How can treatment of this client be more informed or more targeted based on the information you gathered (Approximately 2-3 paragraphs).
    2. Identify at least two possible ethical issues that could arise during your interview (hint: go back to your Module 1 lecture for ideas about ethical issues in interviewing).  Explain how an ethical interviewer should deal with each of these issues. (Approximately 2-3 paragraphs).
Assignment 1 Grading Criteria
Maximum Points
Conducted interview and utilized the questions/techniques for an in-depth interview.
60
Transcribed interview completely. Identified the questions and techniques used.
16
Evaluated the open and closed ended questions used during the interview. Analyzed the effectiveness of the questions and how the patient responded. Suggested ways to improve the effectiveness of the questions.
40
Evaluated at least five interviewing techniques (at least one of each: paraphrase, summary, and reflection). Analyzed the effectiveness of the technique, and how the patient responded. Suggested ways to improve the effectiveness of the techniques.
40
Explained how the information gathered during the interview can aid in treatment planning for the client.
40
Identified at least two possible ethical issues that could arise during the interview. Explained how an ethical interviewer would deal with each of these issues.
40
Organization (16 points): Introduction, transitions, and conclusion

Style (8 points): Tone, audience, and word choice

Usage and Mechanics (16 points): Grammar, spelling, and sentence structure

APA Elements (24 points): In text citations and references, paraphrasing, and appropriate use of quotations and other elements of style

64
Total:
300

 

Could the seller be bid down to a lower asking price?

There is the example to calculate:

A prospective developer is attempting to evaluate whether a proposed development should be undertaken on a site which has planning permission for an 800 square metre office block.
⦁ On completion the development will provide 750 square metres of lettable space. Comparable developments in close proximity yield £350 per square metre.
⦁ The development period is expected to be 24 months with a building period of 12 months: building costs are estimated to be £1500 per square metre. Six months have been allocated prior to building work to account for design, estimation and tendering. Six months have been allowed following the completion of building work for any potential letting voids.
⦁ Building costs fall due over the last 18 months of the development so interest on building costs should be calculated for this period. As is conventional we can include an entry in the budget for half of this total liability.
⦁ Similarly interest on fees should be calculated for an 18 month period. As is conventional we can include an entry in the budget for two thirds of this total liability.
⦁ A contingency allowance of 5% on building costs is to be made. Professional fees are estimated at 12.5 % of building costs, letting’s agents fees at 10% of initial rental value, selling agents’ fees at 3% of gross development value. A £50,000 budget is available for sales and marketing.
⦁ Finance can be arranged at 1.2% per month. A developer’s profit of 15% is required.
THE CURRENT OWNER OF THE SITE ADVERTISES ITS VALUE AT £1,400,000
HOW WOULD YOU ADVISE YOUR CLIENT THE DEVELOPER TO PROCEED?
The residual method (1)
Let’s take things in stages.

You are advising a developer on what would be a fair price to pay for a piece of land upon which the developer wishes to build an office block.
Beginning with the first element – anticipated development value:
Capital value post development
Gross development value on completion of scheme 750 square A
metres @ £350 psm
Year’s purchase in perpetuity @ 6% B
Gross development value C
Begin by calculating the gross development value – what the developer anticipates it will be worth on completion…Then subtract the costs associated with the sale of the development (sales and marketing)…
Gross development value on completion of scheme 750 square 262,500
metres @ £350 psm
Year’s purchase in perpetuity @ 6% 16.667
Gross development value 4,375,000
The residual method 2
Gross development value 4,375,000
Gross development costs
i. Building costs: 800 sq. metres @ £1500 psm 1,200,000
ii. Building finance 143,704
(interest on building costs 1.2% for 18 months x ½)
iii. Professional fees 12.5% on building costs 150,000
⦁ Interest on fees 23,951
1.2% for 18 months x 2/3)
v. Promotion and marketing
(estimated budget) 50,000
⦁ Contingency 78,383
5% on cumulative costs
vii. Agents’ fees:
Letting at 10% on initial rent 26,250
Sale at 4% on gross development value 175,000
viii. Developer’s profit
15% on gross development value 656,250
ix. Total development costs 2,503,538
The residual method 3
Capital value after development 4,375,000
Development costs 2,503,538
Residual valuation
Sum available for land, acquisition and interest 1,871,462
Asking price for site 1,400,000
Acquisition costs @ 4.5% 63,000
Interest on land acquisition @ 1.2% for 24 months 482,790
Sub total 1,945,790
RESIDUAL VALUATION -74,328
What do you think?
⦁ Should the development go ahead?
⦁ Maybe…
⦁ Could the seller be bid down to a lower asking price?
⦁ Alternatively – look at the costs again – the developer requires a 15% profit. If they would accept a 13% profit margin (£581,922) this would bring the development back to parity (residual value of nil).
⦁ BUT
⦁ Bear in mind that if any of the costs are inaccurate on the low side it is the profit margin that is eroded.
⦁ What would you advise?
⦁ Do we always get things right?
⦁ http://www.youtube.com/watch?v=Wms3I5zudLc