Please answer the question below showing workout out. Thank you.

Your client Mr Beanhas provided information on a proposed retail/commercial development as listed below. He expects to be able to sell off the completed development to Miss Choya for $87 million, with an expected net rental value of $6.24 million per year. Where there is lack of information from your Client, you can make your own assumption. Answer the questions below.

Gross Area: 7000 sq. meters

Net area: 6300 sq. meters

Rental Value: $1090 per sq. meter

Vacancy factor: 10%

Non - Recoverable Outgoings: 5%

Capitalisation rate: 6.5%

Disposal Costs: 4%

Marketing and advertising costs: $500,000

Site Clearance: $200,000 - $300,000

Site Remediation: $200,000 - $250,000

Building Costs: $4,000 per sq. meter

Professional fees on site costs: 5%

Professional fees on building costs: 12%

Letting fees: 10% net rental value

Finance costs: 16%/p.a nominal

Pre-construction period: 12 months

Construction period: 30 months

Letting period: 6 months

Incentive period: 6 months

Acquisition costs: 8%

a.Work out the Value on Completion (VoC). Show all workings on your answer.

b.Work out the Total Development Cost (TDC) excluding land. Show all workings on your answer

c.Finance cost is expected to rise by 1.25%. How will this increase in finance cost impact your TDC? What do you recommend to your client in terms of managing this risk?

d.Building cost is expected to rise by 5%. How will this increase affect your TDC. What would you suggest to your client in order to address this issue?

e.The rental value is expected to go up by 15% due to positive outlook in the local property market. How will this change impact your VoC?

f.Due to a condition in your planning approval, the gross area of your development is now reduced by 10%. How will this impact your VoC? Any suggestion to your client to minimize its effect on VoC?