All of the following are characteristics of the classical "Simple Financial Feasibility Analysis" SFFA) procedure for real estate development projects, except:
A) The procedure is easy to understand and apply without advanced or specialized financial knowledge or knowledge of the capital markets other than the local mortgage market).
B) The procedure can be applied from either a "front door" or "back door" perspective.
C) It generally assumes the developer will take out the largest mortgage possible upon completion of the project, and that the project cost will equal its value for applying lender's loan/value criteria.
D) It is based fundamentally on the NPV investment evaluation principle and therefore is consistent with wealth maximization.

Question

Quizplus · Accepted Answer

The Simple Financial Feasibility Analysis (SFFA) is not fundamentally based on the NPV (Net Present Value) investment evaluation principle. SFFA is a more straightforward approach that does not necessarily involve the complex calculations associated with NPV and wealth maximization.

All of the Following Are Characteristics of the Classical "Simple