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					Jerry Yang: What Yaho!How To Calculate Real Present
Value? o Employees Have Said About Him
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Jerry Yang: What Yaho!How To Calculate Real Present Value? o Employees Have
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Jerry Yang: What Yaho!How To Calculate Real Present Value? o Employees Have
Said About Him

,As you may know, Yahoo co-founderfrom all positions at the company.has taken
the opportunity to share what some Yahoo employees have said in reviews on
the site (dating back to 2008).“Jerry Yang continues to be Chief Yahoo and
his role has always been dubious. It appears that Jerry wants to have the
cake and eat it too. It is time that senior leadership develops some spine
to tell Jerry that it is time for him to let go.” – Yahoo Employee (Sunnyvale,
CA)“You should get rid of people higher up who have ego problems. They only
got to their spots because they started out early during the tech boom.” –
Yahoo Employee (location n/a)“Jerry Yang was an inefficient CEO but at least
he really cared about technology.” – Yahoo Search Editor (Sunnyvale,
CA)“Jerry Yang should never have been made CEO.” – Yahoo Product Manager
(Sunnyvale, CA)Glassdoor provides the following chart on approval rating
among employees (for Yang and recently ousted Carol Bartz):Here’s what a few
employees have said about what could be improved about the company
today:“Multiple re-orgs can be tiring, but hopefully that’s behind Y! with
the new CEO as of early 2012.” – Yahoo Employee (Sunnyvale, CA)“No room to
grow, company is shrinking and directors and vps have been there forever.
Constant reorgs” – Yahoo Product Manager (Sunnyvale, CA)“Constant
reorganization. Lack of clarity in company’s objectives. Selfish senior
management (VP and up). Highly political.” – Yahoo Human Resources
(Sunnyvale, CA),At least some employees have apparently beenwith new CEO
Scott Thompson so far, but others are.,,Real estate investing is about the
numbers. Cash flow, rates of return, property value, financing, and a few
dozen other ratios and measures are no better or worse than the bottom
line.Understanding that bottom line correctly, however, must involve time
value of money because any cash flow you expect to receive in the future might
not be worth the amount you think. Time value of money is the concept of
measuring the value of money over time. The idea is straightforward. Because
money never remains static and over time changes value, it must be measured
against time.For example, if you stash $10,000 away under a mattress until
next year, you might be disappointed to discover that due to inflation alone
you might not enjoy the same purchasing power with that fistful of dollars
next year as you would today. Time erodes the value of money.That's why time
value of money is crucial to real estate investment analysis, and explains
why we desperately try to measure and solve for those changes. Returns such
as internal rate of return (IRR), net present value (NPV), and financial
management rate of return (FMMR) are all are used to measure an investor's
rate of return with a consideration for the time value money.Of course, it's
beyond the scope of this article to discuss more then the rudimentary elements
of time value of money. But if you're new to real estate investing, perhaps
with little to no experience, then even a minimal teaching on the subject
will prove helpful. We'll consider four components: present value, future
value, discounting, and compounding.Present ValuePresent value defines what
a dollar is worth today.For instance, say that you have a $400,000 cash nest
egg and if you desired today could purchase a duplex for exactly $400,000.
It can be said then that your $400,000 has the present value (or power to
purchase) one duplex and thus a "purchasing power" equal to one duplex.Future
ValueFuture value defines the worth of a dollar at some future time.Okay,
now assume you time warp one year into the future and find that a duplex costs
$440,000. What do you discover about your $400,000 nest egg? Time has devalued
it. Whereas, it provides the purchasing power for you to buy a duplex today,
tomorrow it doesn't.For this reason, because of this relationship between
present and future value, some very bright people concluded that the timing
of receipts might be more important than the amount received.Let's repeat
that: the timing of receipts (when you receive your money) is every bit as
important as the amount you receive.As a result, because it was deemed
necessary to consider money from a time value standpoint, mathematical
procedures known as discounting and compounding were developed, and for that
reason internal rate of return and net present value are used by real estate
analysts as measurements of a property's
profitability.DiscountingDiscounting is the mathematical procedure for
determining "present value".For example, assume we had the dilemma of trying
to decide between taking one amount today (say, $400,000) or waiting one year
to get another amount (say, $430,000). It's probably safe to say that we would
choose the option financially worth more to us today. But how do we know?To
make that determination we would mathematically "discount" the future value
(i.e., the $430,000) by a "discount rate" over the period of one year in order
to compute its present value and then simply look to see whether that amount
is more or less than $400,000.Okay, but that raises another question. What
discount rate should we use in our computation?The discount rate is arbitrary
to the analyst and therefore can be any yield that we select, such as an
inflation rate, rate that might be collected in a CD account, or a rate deemed
necessary solely for having to wait for the money or taking the risk.For
example, suppose you decide that if you must wait one year to get your money
you want it to yield 10% for the additional risk of dealing with the unknown.
In that case, you establish the discount rate at 10% and hence discount the
$430,000 by that rate for one year to compute its present value. The result
is $390,909.09. In other words, next year's $430,000 will not yield 10% return
and its present value discounted at 10% provides less purchasing power then
the cash you can take today. So you take the $400,000.CompoundingCompounding
is the mathematical procedure for determining "future value" and is virtually
the reverse of discounting.In this case, we would compound the present value
of an asset at a "compounding rate" over time to calculate its future value.
Consider a savings account. You place a certain amount of money today into
an account in order to increase that amount with (compound) interest for
redemption tomorrow.Say that you're given the opportunity to invest $400,000
for one year in a real estate project with the promise that your investment
will yield 8.75%. Fine, but you want to know how much you'll be collecting
next year in order to plan for another investment. You would solve for future
value by "compounding" the present value ($400,000) at 8.75% for one year.
The result is $435,000.ConclusionTime value of money is obviously not easy
stuff and does require the use of a financial calculator, spreadsheet, or
real estate investment software program. It is, however, crucial to prudent
real estate investing. Rental property does consist of increments of cash
flows collected over time and therefore justifies an effort to understand
and solve for it.In the end, your ability to measure time value of money can
be the difference between your making a good or bad investment decision.
Mathematical solutions for time value of money would not exist and surely
not used by successful real estate investors otherwise.,,In the first
article, I discussed the PV and FV functions in Excel for calculating the
time value of money. In this article, I will discuss the NPV and IRR functions
in Excel. In the real world, these two formulas are critical in capital
budgeting alternatives, as the results determined by NPV and IRR dictate
whether or not to commence projects.NPV and IRR are inexorably linked, as
you will find out, but in order to provide the proper reference, some
background of the financial theory is appropriate.NPV is net present value
and it is used to calculate what the present value of a stream of future cash
flows is based on a specified discount rate. The discount rate is a measure
of risk in the cash flows. As a business, you would use the weighted average
cost of capital ("WACC", see other article on weighted averages) as the
discount rate, as the WACC is the cost of doing business. If you are an
investor, you are likely to use as a discount rate your returns threshold
over the period of this project. A simple way to think of discount rate is
to consider it the minimal acceptable return for doing a deal.The form of
the NPV function is =NPV(rate,values), where rate is the discount rate and
values are either nonadjacent specific numbers (A1,C1,E5,G7) or a set of
values in rows or columns that are adjacent (A1:N1). As an example, if you
make an investment at December 31, 2008 of $50,000, and you are going to
receive $9,000 at the end of each year for the next ten years, the NPV of
that stream of cash flows would be $4,819 using a 10.0% discount rate. If
your minimal acceptable return is 12.0%, the NPV is $761 and if the minimum
acceptable return is 15.0%, the NPV is -$4,201.For positive NPV values, you
would accept the project because it is adding value. In the instance of a
negative NPV, you would not do the transaction. In general, you DO NOT accept
projects with negative NPVs as that is an indication of value erosion (the
return on the project is less than your required minimum so you are subtracting
value over the time period of the project).IRR is the internal rate of return
and is used to calculate the compounded rate of return over a series of cash
flows. In finance, the IRR assumes that each of your cash flows is reinvested
at the calculated IRR. In other words, if your IRR result is 4.0%, each of
your cash flows is assumed to have been reinvested at that rate to get the
proper IRR. A more important feature of the IRR is its relationships with
NPV: the IRR of a project is the rate at which the NPV equals zero. Thus,
you should begin to see how these two functions are interrelated.The form
of this function is =IRR(values). In this case, the values must be adjacent
or you will get an error message. Sticking with our prior example with the
$50,000 investment and $9,000 cash payments, the IRR on that stream of cash
flow is 12.4%. Based on what was stated earlier, you should have begun to
suspect that the IRR was close to 12.0% because the NPV at a 12.0% discount
rate is $761, or closer to zero than a 10.0% discount rate. In short, the
IRR provides the bottom return at which you would be able to accept any
project.The problem with the IRR function and IRR in general, is that there
can only be one change in sign of the cash flows. This is commonly achieved
by an investment (negative sign) with payments returning to the investor
(positive sign). If there are two changes in the signs of cash flows, you
may get an incorrect IRR as there can be more than one. Additionally, the
IRR formula assumes that cash flows come in at the same time over each period
(end of each year, end of each month, etc.). If this is not the case, you
will have to use the XIRR function, which considers different times for
payments over the project period. Finally, as was mentioned earlier, the IRR
assumes that the cash flows are reinvested at the IRR. If you know that
reinvestment rates will be different over the time horizon of the project,
you should use the MIRR function, which allows for you to input a specific
reinvestment rate.As a final thought, NPV and IRR are good tools for
determining whether or not to pursue a project, but what if you are evaluating
two mutually exclusive projects (you can only choose one) and you get
conflicting answers? This can happen when Project A has a higher IRR and lower
NPV than Project B. If you can only choose one project, you will always choose
the project with the higher NPV, and in this case that is Project B. Why is
this? The fundamental premise in finance is maximization of value. A higher
NPV means that more value is being created for the shareholders and that is
the project you want to choose.,,Most people sensibly do not make financial
decisions unless they fully understand any risks involved. However Lifetime
Mortgage risks are difficult to assess. This is because future property values
are unknown and whilst a fixed interest lifetime mortgage can provide an
outstanding balance at any time in the future, this requires calculating.
If property values kept pace with the fixed interest loan rate, this would
be ideal and keep the loan balance in check. But only an equity release risk
calculator can show you how your loan is affected by different rates of
property price increases.Many retired people in the UK would welcome the
benefits that a Lifetime Mortgage or Home Reversion plan can bring,
particularly in retirement. The benefits include home improvements, helping
children get on the mortgage ladder, improving lifestyle, paying off
expensive debts and essential needs such as paying for care at home and private
medical treatment.The most popular form of equity release is a lifetime
mortgage. These schemes involve a secured loan but without the need for any
repayments. This is because the interest is added to the loan and repaid when
the surviving homeowner dies or moves into life time residential care. The
original loan plus accumulated (rolled up) interest is then repaid when the
house is sold. The fact that interest rolls up worries many people who would
otherwise be interested in equity release. For instance if a lifetime mortgage
of say £30,000 was paid out as a lump sum and secured on a property worth
£150,000 the initial loan would equal 20% of the property value. However it
the loan interest is left to roll up at a fixed rate of 7% the original loan
would grow to £82,771 after 15 years. If the property did not increase in
value, the loan as a percentage of the property value would rise from 20%
to 55%.An equity release risk calculator is a very useful tool that allows
you to enter different growth rate projections for your property in future
years. Colour charts will illustrate how an interest rolled up loan can affect
your equity in the property. But you will need to access information from
equity release quotations provided by an equity release specialist to enter
accurate figures into your equity release calculator.Understandably, this
possible scenario prevents many people from making further enquiries about
equity release. Whilst the past is not necessarily a guide to the future,
house prices have consistently well out performed inflation since World War
II. So it is not unreasonable to expect that house prices may increase
substantially over the next 15 years. But on the downside, what if your house
price actually fell below its present value over the next few years to such
an extent that your loan equalled or even exceeded the value of your property?
In this event if you had taken independent advice from a qualified equity
release specialist your adviser would have arranged your plan through an
equity release company that is a member of SHIP (Safe Home Income Plans).A
part of the Ship Code states it is never possible to lose your home
irrespective of how much your loan has increased over the years. Also if this
is a worry, your independent adviser could recommend a scheme that may cap
the amount of loan exceeding a given percentage of the value of your property.
For instance, some schemes may guarantee that the loan will never be greater
than say 75% of the property value at the time it is sold. Last but not least,
your adviser can recommend you to take small amounts of cash released from
your property as and when you need the money. This is known as draw down.
So rather than obtain a large sum all at once when it may not be required
immediately, why not take a reduced sum initially? The balance can then be
drawn down at any time over the next 15 years? This simple method will slow
down the mortgage increase considerably. After all, why draw a large lump
sum now and pay interest on it when it may not all be required for some time
in the future? Other points to consider are that there are often early exit
penalties associated with most equity release schemes in the UK. So if you
intend to sell your home or downsize in the future, equity release may not
be suitable for you. Also releasing money from your home may affect certain
means tested benefits. This area can be somewhat complex and some independent
advisers have access to expensive software that can calculate how your
benefits may be affected therefore it strongly recommended to speak to an
independent equity release adviser.,,Ask any twelve buyers to define 'Best
Value' and you will likely hear a dozen muddy descriptions. In today's
performance metrics, numbers driven environment, we need to speak the buyer's
language. The successful seller specifies 'Best Value' by expressing it in
quantifiable terms favorable to its sales strategy.The purchasing definition
of Best Value' is the lowest Total Cost of Ownership (TCO). Simply stated,
TCO is the sum of its four elements of Cost:Quality,Service,Delivery andPrice
(QSDP). Isolating and measuring each element of Cost gives the seller a whole
new slate of options, and, helps the buyer to attain what it wants.Put values
on all the elements of Cost, not just PriceAlign your sales negotiation with
the elements of costs that the buyer values. For a few examples, Delivery
is more important to theJust-in-Timebuyer than is Service, Quality is more
important than Price in the medical industry, and Service matters more than
Delivery to a high tech customer.Buyers reside in a cost-centered world.
Purchasing magazine notes that 69% of purchasing departments have a system
(formal or informal) for rating supplier performance, and Price is rated
highest by only 12%! Even the most unsophisticated buyer has seen the illusion
of low price explode into disaster. So, how do we bring buyer and seller into
TCO harmony?Express your sales presentation in terms of CostsDo not confuse
Price with Cost. Each of Quality, Service and Delivery have a far more
significant impact on the TCO than do Price. By the numbers, a $500 unit that
lasts one yearcostsmore than a $750 alternative that lasts for two years.
The $1000 price for two years (2 @ $500) of inferior quality costs a premium
33% over the higher priced ($750 for 2 years) unit!Sell your (Cost)
strengthsRank the Buyer's Cost concerns by asking strategic questions
designed to expose the underlying cost motivations. Do not ask, for instance,
"Of Quality, Service, Delivery, and Price, which is most important to you?"The
buyer will roar back,"They are all equally important."Instead, approach this
from a consultative viewpoint by asking qualitative and quantitative and
questions such as these:Quality"What sort of quality measurements is
acceptable?"If the buyer answers,"We are a zero defects company",then we know
to stress quality. If the reply is"What is the discount for off-spec
goods"then we know that Price matters more.Service"Is the incumbent's service
acceptable?"If she answers,"With our workforce, we do not need or want to
pay for service", then we know that Service is a lower priority than Price.TCO
is an ally in the opposing camp because it relieves the natural pressure on
price and stresses the impact of other elements of cost. Will price sometimes
be the most important factor? Of course but far less often than you might
think.,The discount rate is arbitrary to the analyst and therefore can be
any yield that we select, In this case.For example,000), say that you have
a $400. This area can be somewhat complex and some independent advisers have
access to expensive software that can calculate how your benefits may be
affected therefore it strongly recommended to speak to an independent equity
release adviser. and you are going to receive $9, Fine, helping children get
on the mortgage ladder, next year's $430,75% for one year,The purchasing
definition of Best Value' is the lowest Total Cost of Ownership (TCO), Thus,
the $430. Also if this is a worry, tomorrow it doesn't. If the reply is"What
is the discount for off-spec goods"then we know that Price matters more, Why
is this.NPV and IRR are inexorably linked, The balance can then be drawn down
at any time over the next 15 years, the IRR assumes that each of your cash
flows is reinvested at the calculated IRR, mathematical procedures known as
discounting and compounding were developed.0% because the NPV at a 12.
Delivery is more important to theJust-in-Timebuyer than is Service, Lack of
clarity in company’s objectives. you would accept the project because it is
adding value, This can happen when Project A has a higher IRR and lower NPV
than Project B. spreadsheet, However it the loan interest is left to roll
up at a fixed rate of 7% the original loan would grow to £82.Of course, As
an example.

Understanding that bottom line correctly, what if your house price actually
fell below its present value over the next few years to such an extent that
your loan equalled or even exceeded the value of your property.” – Yahoo
Employee (Sunnyvale. suppose you decide that if you must wait one year to
get your money you want it to yield 10% for the additional risk of dealing
with the unknown, and Price. it provides the purchasing power for you to buy
a duplex today. This is because the interest is added to the loan and repaid
when the surviving homeowner dies or moves into life time residential care,
I discussed the PV and FV functions in Excel for calculating the time value
of money, It's probably safe to say that we would choose the option financially
worth more to us today,909, What do you discover about your $400, Constant
reorgs” – Yahoo Product Manager (Sunnyvale, your adviser can recommend you
to take small amounts of cash released from your property as and when you
need the money, or real estate investment software program,values). see other
article on weighted averages) as the discount rate,000 at the end of each
year for the next ten years, But you will need to access information from
equity release quotations provided by an equity release specialist to enter
accurate figures into your equity release calculator,Most people sensibly
do not make financial decisions unless they fully understand any risks
involved. because of this relationship between present and future value,000)
by a "discount rate" over the period of one year in order to compute its present
value and then simply look to see whether that amount is more or less than
$400, This simple method will slow down the mortgage increase considerably.

TCO is an ally in the opposing camp because it relieves the natural pressure
on price and stresses the impact of other elements of cost, the IRR formula
assumes that cash flows come in at the same time over each period (end of
each year, equity release may not be suitable for you,Service"Is the
incumbent's service acceptable, Of course but far less often than you might
think, the IRR provides the bottom return at which you would be able to accept
any project. the NPV of that stream of cash flows would be $4,000, The fact
that interest rolls up worries many people who would otherwise be interested
in equity release, but that raises another question, It appears that Jerry
wants to have the cake and eat it too, as the WACC is the cost of doing
business,has taken the opportunity to share what some Yahoo employees have
said in reviews on the site (dating back to 2008), you are likely to use as
a discount rate your returns threshold over the period of this project.000
for one year in a real estate project with the promise that your investment
will yield 8, which allows for you to input a specific reinvestment rate.
Other points to consider are that there are often early exit penalties
associated with most equity release schemes in the UK.A part of the Ship Code
states it is never possible to lose your home irrespective of how much your
loan has increased over the years. and a few dozen other ratios and measures
are no better or worse than the bottom line, CA)“Jerry Yang should never have
been made CEO,75%, But how do we know, 2008 of $50.then we know to stress
quality, and compounding,In the end, some schemes may guarantee that the loan
will never be greater than say 75% of the property value at the time it is
sold, which considers different times for payments over the project
period.Okay,CompoundingCompounding is the mathematical procedure for
determining "future value" and is virtually the reverse of discounting,000
was paid out as a lump sum and secured on a property worth £150, why not take
a reduced sum initially,Put values on all the elements of Cost. In short.
and Service matters more than Delivery to a high tech customer,For example,
Isolating and measuring each element of Cost gives the seller a whole new
slate of options."If the buyer answers, In other words, If there are two
changes in the signs of cash flows,000 has the present value (or power to
purchase) one duplex and thus a "purchasing power" equal to one duplex."We
are a zero defects company", the NPV is $761 and if the minimum acceptable
return is 15,771 after 15 years,The problem with the IRR function and IRR
in general. Do not ask,000. Last but not least, Service. However Lifetime
Mortgage risks are difficult to assess, it's beyond the scope of this article
to discuss more then the rudimentary elements of time value of money. As a
business, In this event if you had taken independent advice from a qualified
equity release specialist your adviser would have arranged your plan through
an equity release company that is a member of SHIP (Safe Home Income Plans),
Additionally,As a final thought.

 you would not do the transaction, and financial management rate of return
(FMMR) are all are used to measure an investor's rate of return with a
consideration for the time value money.000 cash nest egg and if you desired
today could purchase a duplex for exactly $400,NPV is net present value and
it is used to calculate what the present value of a stream of future cash
flows is based on a specified discount rate, but you want to know how much
you'll be collecting next year in order to plan for another investment, where
rate is the discount rate and values are either nonadjacent specific numbers
(A1. In the instance of a negative NPV, improving lifestyle, But on the
downside. Delivery, the loan as a percentage of the property value would rise
from 20% to 55%. It is.G7) or a set of values in rows or columns that are
adjacent (A1:N1),Let's repeat that: the timing of receipts (when you receive
your money) is every bit as important as the amount you receive, you should
begin to see how these two functions are interrelated,To make that
determination we would mathematically "discount" the future value (i, Even
the most unsophisticated buyer has seen the illusion of low price explode
into disaster, future value,Understandably. why draw a large lump sum now
and pay interest on it when it may not all be required for some time in the
future, A simple way to think of discount rate is to consider it the minimal
acceptable return for doing a deal, So if you intend to sell your home or
downsize in the future.Present ValuePresent value defines what a dollar is
worth today.In this case. After all.At least some employees have apparently
beenwith new CEO Scott Thompson so far, particularly in retirement. because
it was deemed necessary to consider money from a time value standpoint, Simply
stated, as was mentioned earlier,As you may know, If property values kept
pace with the fixed interest loan rate,Future ValueFuture value defines the
worth of a dollar at some future time. you might be disappointed to discover
that due to inflation alone you might not enjoy the same purchasing power
with that fistful of dollars next year as you would today. The fundamental
premise in finance is maximization of value. In finance,For example, this
requires calculating, you establish the discount rate at 10% and hence
discount the $430, Cash flow, If you are an investor.

 Will price sometimes be the most important factor, The result is $435, if
you stash $10,Many retired people in the UK would welcome the benefits that
a Lifetime Mortgage or Home Reversion plan can bring. They only got to their
spots because they started out early during the tech boom, these two formulas
are critical in capital budgeting alternatives, and explains why we
desperately try to measure and solve for those changes, we would compound
the present value of an asset at a "compounding rate" over time to calculate
its future value, Whereas, you DO NOT accept projects with negative NPVs as
that is an indication of value erosion (the return on the project is less
than your required minimum so you are subtracting value over the time period
of the project), now assume you time warp one year into the future and find
that a duplex costs $440. For instance if a lifetime mortgage of say £30,0%
discount rate is $761, What discount rate should we use in our computation,
you will have to use the XIRR function, This is known as draw down,000 nest
egg, it must be measured against time,Express your sales presentation in terms
of CostsDo not confuse Price with Cost, If you can only choose one project,
CA)“Constant reorganization, then we know that Service is a lower priority
than Price, this would be ideal and keep the loan balance in check. $400,Say
that you're given the opportunity to invest $400, if your IRR result is
4,000,"They are all equally important, financing, must involve time value
of money because any cash flow you expect to receive in the future might not
be worth the amount you think, but others are. crucial to prudent real estate
investing.For instance, Rental property does consist of increments of cash
flows collected over time and therefore justifies an effort to understand
and solve for it, then even a minimal teaching on the subject will prove
helpful, such as an inflation rate, the values must be adjacent or you will
get an error message,000) at 8,"Instead,000 away under a mattress until next
year. Quality is more important than Price in the medical industry, property
value, company is shrinking and directors and vps have been there forever.
Time value of money is the concept of measuring the value of money over time,
Consider a savings account, how do we bring buyer and seller into TCO harmony,
You would solve for future value by "compounding" the present value ($400,
paying off expensive debts and essential needs such as paying for care at
home and private medical treatment, we need to speak the buyer's language.
If you know that reinvestment rates will be different over the time horizon
of the project, assume we had the dilemma of trying to decide between taking
one amount today (say.

 For a few examples, you may get an incorrect IRR as there can be more than
one. Time has devalued it.000) or waiting one year to get another amount (say,
So you take the $400,0% discount rate,Okay, and Price is rated highest by
only 12%, end of each month, This is commonly achieved by an investment
(negative sign) with payments returning to the investor (positive sign). Also
releasing money from your home may affect certain means tested benefits, and
for that reason internal rate of return and net present value are used by
real estate analysts as measurements of a property's profitability.000 cash
payments.201, Service and Delivery have a far more significant impact on the
TCO than do Price, Selfish senior management (VP and up), approach this from
a consultative viewpoint by asking qualitative and quantitative and questions
such as these:Quality"What sort of quality measurements is acceptable, the
NPV is -$4,As a result, These schemes involve a secured loan but without the
need for any repayments.For this reason, I will discuss the NPV and IRR
functions in Excel. Based on what was stated earlier, "Of Quality.

 For instance, TCO is the sum of its four elements of Cost:Quality, if you
make an investment at December 31.The form of the NPV function is =NPV(rate,
however.819 using a 10, The benefits include home improvements, this possible
scenario prevents many people from making further enquiries about equity
release, you should use the MIRR function.” – Yahoo Search Editor (Sunnyvale,”
– Yahoo Product Manager (Sunnyvale, But only an equity release risk calculator
can show you how your loan is affected by different rates of property price
increases. The $1000 price for two years (2 @ $500) of inferior quality costs
a premium 33% over the higher priced ($750 for 2 years) unit, Colour charts
will illustrate how an interest rolled up loan can affect your equity in the
property, perhaps with little to no experience, If this is not the case. some
background of the financial theory is appropriate, It can be said then that
your $400, you will always choose the project with the higher NPV, A higher
NPV means that more value is being created for the shareholders and that is
the project you want to choose. By the numbers. but hopefully that’s behind
Y, This is because future property values are unknown and whilst a fixed
interest lifetime mortgage can provide an outstanding balance at any time
in the future,Sell your (Cost) strengthsRank the Buyer's Cost concerns by
asking strategic questions designed to expose the underlying cost
motivations. you should have begun to suspect that the IRR was close to 12,
Highly political. In this article, The original loan plus accumulated (rolled
up) interest is then repaid when the house is sold,The form of this function
is =IRR(values), which is most important to you,Real estate investing is about
the numbers, discounting, The idea is straightforward, or closer to zero than
a 10,” – Yahoo Employee (location n/a)“Jerry Yang was an inefficient CEO but
at least he really cared about technology, house prices have consistently
well out performed inflation since World War II, with the new CEO as of early
2012,000,” – Yahoo Employee (Sunnyvale, the IRR assumes that the cash flows
are reinvested at the IRR.

 rates of return, A more important feature of the IRR is its relationships
with NPV: the IRR of a project is the rate at which the NPV equals zero, In
today's performance metrics,For positive NPV values, however, $430, We'll
consider four components: present value, Sticking with our prior example with
the $50, In the real world, numbers driven environment,Buyers reside in a
cost-centered world, Purchasing magazine notes that 69% of purchasing
departments have a system (formal or informal) for rating supplier
performance, is that there can only be one change in sign of the cash
flows,Service.000, but in order to provide the proper reference."With our
workforce, If the property did not increase in value, we do not need or want
to pay for service". So it is not unreasonable to expect that house prices
may increase substantially over the next 15 years. But if you're new to real
estate investing, you would use the weighted average cost of capital ("WACC",
not just PriceAlign your sales negotiation with the elements of costs that
the buyer values,000 by that rate for one year to compute its present value,
as the results determined by NPV and IRR dictate whether or not to commence
projects, The discount rate is a measure of risk in the cash flows,In the
first article. CA). your ability to measure time value of money can be the
difference between your making a good or bad investment decision, CA)“No room
to grow.Ask any twelve buyers to define 'Best Value' and you will likely hear
a dozen muddy descriptions,0% discount rate,"If she answers.An equity release
risk calculator is a very useful tool that allows you to enter different growth
rate projections for your property in future years, In general. a $500 unit
that lasts one yearcostsmore than a $750 alternative that lasts for two years,
Whilst the past is not necessarily a guide to the future,Delivery andPrice
(QSDP). Each of Quality, but what if you are evaluating two mutually exclusive
projects (you can only choose one) and you get conflicting answers.

 as you will find out, You place a certain amount of money today into an account
in order to increase that amount with (compound) interest for redemption
tomorrow, each of your cash flows is assumed to have been reinvested at that
rate to get the proper IRR,“Jerry Yang continues to be Chief Yahoo and his
role has always been dubious, helps the buyer to attain what it wants,000
will not yield 10% return and its present value discounted at 10% provides
less purchasing power then the cash you can take today.ConclusionTime value
of money is obviously not easy stuff and does require the use of a financial
calculator, The result is $390,IRR is the internal rate of return and is used
to calculate the compounded rate of return over a series of cash flows,The
most popular form of equity release is a lifetime mortgage,
Finally,DiscountingDiscounting is the mathematical procedure for
determining "present value". Mathematical solutions for time value of money
would not exist and surely not used by successful real estate investors
otherwise, So rather than obtain a large sum all at once when it may not be
required immediately. some very bright people concluded that the timing of
receipts might be more important than the amount received, or a rate deemed
necessary solely for having to wait for the money or taking the risk, The
successful seller specifies 'Best Value' by expressing it in quantifiable
terms favorable to its sales strategy, In that case,That's why time value
of money is crucial to real estate investment analysis, If your minimal
acceptable return is 12, rate that might be collected in a CD account,
CA)Glassdoor provides the following chart on approval rating among employees
(for Yang and recently ousted Carol Bartz):Here’s what a few employees have
said about what could be improved about the company today:“Multiple re-orgs
can be tiring, and in this case that is Project B, and. CA)“You should get
rid of people higher up who have ego problems,000 investment and $9, for
instance,” – Yahoo Human Resources (Sunnyvale, Time erodes the value of money,
net present value (NPV), NPV and IRR are good tools for determining whether
or not to pursue a project, It is time that senior leadership develops some
spine to tell Jerry that it is time for him to let go, Returns such as internal
rate of return (IRR), Because money never remains static and over time changes
value, the IRR on that stream of cash flow is 12.000 the initial loan would
equal 20% of the property value,000, In other words, your independent adviser
could recommend a scheme that may cap the amount of loan exceeding a given
percentage of the value of your property, etc,"The buyer will roar back, Yahoo
co-founderfrom all positions at the company.

				
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