Problems that Sexton Incurred that Were Avoidable and Beyond His Control

You only need to write the Q4 "Which problems that Sexton incurred were avoidable, and which were beyond his control?" from Part1 in one or two paragraphs.
Please do not include any summary of the case in the beginning and recommendation in the end.

Instructions for 503 Cricket Road Case This case illustrates the development process including all the hoops, hurdles and roadblocks that a developer may face along the way. It provides useful background information and proves useful in later cases. The assignment should be completed in a Word document and an Excel document, with clear references connecting the two. In addition to submitting the assignment to Dropbox, bring your work (specifically your Excel worksheets) with you to class, as we will be working through some variations to the project in class. Part I: Read the case and briefly answer the four discussion questions posed below. The best way to proceed is to first quickly read the case to get a feel for what is going on. Then read the discussion questions and go back and reread the case more carefully, thinking about how to address the issues raised in the questions. 1. How well does Sexton carry out the conceptual, investigative, and planning stages of this development? 2. How and why does Sexton change his initial plan over time? 3. How does Sexton’s return compare with his investment as the setup is revised over time? In your response to this question, you should calculate the return on total costs and return on equity for both the initial setup in Exhibit 3 and the revised setup in Exhibits 5 and 6. 1 4. Which problems that Sexton incurred were avoidable, and which were beyond his control? Part II: Set up Exhibit 7 in Excel as it is shown in the case. Do not simply copy the numbers. You should set up the first year operating cash flows using appropriate formulas. Then, grow net income and operating expenses by 5 percent per year as assumed in the exhibit. For the reversion cash flows, follow the approach used in the exhibit. Use Excel functions to determine the NPV and IRR. Once you have replicated the Exhibit 7 numbers, go back and make any changes you feel are appropriate and report the impact on the IRR and NPV. In your write-up, describe this sensitivity analysis, the reasoning for your modifications, and the results. 1 Return on Total Costs = NOI/Total Costs and Return on Equity = Net Cash Flow after Debt Service/Cash or Equity Invested. In the terminology of the case, “Income from Operations” and “Net Cash Flow if free and clear of debt” are both the same as NOI.