Marketing and selling condos
Number to sell 120
Monthly marketing, maintenance cost $800
Commission per condo sale $30,000
Bonus if at least half sold in year 1 $200,000
Extra bonus if all sold in 2 years $500,000
Discount rate (monthly) 0.8%
Deterministic model
Best guess for sales per month 5
Months to sell out
Month 1 2 3 4 5
Number remaining to be sold
Number sold this month
Maintenance cost
Revenue from sales
Bonus at end of year 1
Bonus at end of year 2
Net revenue
Months to sell out
Total bonus
NPV
6 7 8 9 10 11 12 13
14 15 16 17 18 19 20 21
22 23 24
A B C D E F G H I J K L M N O P Q R S T U V W X Y Z AA AB AC AD AE AF AG AH AI AJ AK AL AM AN AO
1 Marketing and selling condos
2
3 Number to sell 120
4 Monthly marketing, maintenance cost $800
5 Commission per condo sale $30,000
6 Bonus if at least half sold in year 1 $200,000
7 Extra bonus if all sold in 2 years $500,000
8 Discount rate (monthly) 0.8%
9
10 Simulation model
11 Distribution of demand for condos each month (Poisson distributed)
12 Mean demand per month 5
13
14 Month 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40
15 Demand this month
16 Number remaining to be sold
17 Number sold this month
18 Maintenance cost
19 Revenue from sales
20 Bonus at end of year 1
21 Bonus at end of year 2
22 Net revenue
23
24 Months to sell out
25 Total bonus