Case Study - Domus Developments: To build or not to build?
Introduction
It was October 2013 and Michael Mescia, a project manager of Domus Developments (Domus), was contemplating to relaunch the North Point Lofts (North Point) development project that had not yet come to fruition in 2008. With most of Domus's other development projects currently near completion, Mescia wondered whether the right time had finally arrived to start work on the long-waited North Point project.
Mescia wanted to evaluate North Point's outcomes, including Domus's ongoing cash position during the building process and its relevant qualitative considerations. Conversely, Mescia wondered how much the land's value had appreciated over the years and whether selling the land might be Domus's most profitable option. Mescia's decision should support Domus with its corporate goal of developing an esteemed reputation in the market.
Required:
a) Prepare a 24-month cash budget for building North Point, starting in May 2014. (Cash budget template will be provided.)
b) Should Domus build North Point or sell the land? Support your decisions considering both qualitative and quantitative factors.
Attachment:- Case Study.pdf