Monthly or Annual Cash Flows
For an REPE modeling interview, would you use monthly or annual cash flows?
Monthly would provide more accurate returns, but I don’t want to come off as pretentious.
For an REPE modeling interview, would you use monthly or annual cash flows?
Monthly would provide more accurate returns, but I don’t want to come off as pretentious.
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I would do monthly CF, roll that up into an annual CF summary, then do the waterfall on monthly basis for accuracy.
This is assuming you have time to do all that.
Depends how much time you have but you should definitely know how to do monthly cash flows. You can always make a tab that summarizes the monthly cash flows into yearly cash flows. In your monthly cash flows tab just add a row for the year, then do a sumif function for the annual cash flows tab.
If the problem says something like "stabilization occurs at 18 moths" then they probably want you do to monthly.
Agree with everyone above. If you a bomb dashboard, then yearly is fine.
Also depends on the information they give. Ending leasterms during the cashflow period with a lot of under- or overrent could affect the returns significantly. In this case a monthly CF model is preferable.
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