With a site under control, the developer will begin to evaluate the feasibility of the project. The main tool that a developer will use in determining the financial feasibility of a project is:
A) Net present value (NPV) analysis
B) Cost approach to valuation
C) Repeat-sales approach
D) Direct capitalization

Question

Quizplus · Accepted Answer

Net present value (NPV) analysis is the main tool used by developers in determining the financial feasibility of a project. This analysis takes into account the time value of money and calculates the present value of expected cash inflows and outflows to determine whether the project will be profitable or not. The other options mentioned (cost approach, repeat-sales approach, and direct capitalization) are all related to real estate appraisal and valuation, but are not the primary tools used for determining financial feasibility.

With a Site Under Control, the Developer Will Begin to Evaluate