The Eastview Heights Development Project: Now or Later?

Farmed homes and Hundew Development Group are considering two options or developing Eastview Development project!The irst option with smaller lots ma" "ield ro#ust rewards #ut involves greater ris$s compared to the second alternative with #igger lots which can ta$e o immediatel"! % cost #ene it anal"sis would #e use ul to evaluate the ris$s and rewards o development options!The magnitude o ris$s to #e managed #" #oth the companies will #e a crucial aspect o the decision ma$ing process !& the rewards justi " the ris$s' then the dela"ing the project ma$es sense! The su#tle e ect o dela"ing or ta$ing o project immediatel" re(uires care ul (ualitative and (uanitiative considerations to ull" evaluate its impact on the #oth companies!The core values o Hundew group triangulates around time' price and (ualit"! These have earned the compan" reputation' trust and made it a recogni)a#le #rand among its customers! &n the emerging mar$ets o Peter#orough' competition is ierce and land price'e*pensive!The resu#mission o the dra t plan ma" lead to dela"s and high development costs as compared to its competitors!Dela"ing the project will also e*pose it to mar$et' inancial' construction and partnership ris$s etc! resulting in lesser return on investment o sta$eholders! +econdl"' the project ma" #e rushed to meet inancial targets in case o approval o the ,smaller lot- scheme which ma" lead to compromise on the design' (ualit"' price and time ! Thirdl"' a dela" could ma$e the project vulnera#le to adverse mar$et conditions li$e high in lation and.or interest rates' recession etc! Furthermore' the companies are developing this land in partnership! % ter one "ear a partner in the project ma" #e una#le to meet its o#ligations and disagree on the wa" orward! NP/ anal"sis #ased on Discounted cash low 0D1F2 is used to evaluate the d"anamics o the projects gives negative NP/ o 034'556'7852 or dela"ing the project and positive NP/ o 39'6:8';<5 or ta$ing o the project immediatle"! =ut this anal"sis is #ased on a lot o assumptions! The demographic and mar$et stud" o Peter#orough area in conjunction with the developer>s e*perience in local mar$et will help #oth companies to decide the right mi*' t"pe' si)e' design' eatures' pricing and inall" sales! ?e er E*hi#it ; &n conclusion' proceeding with ,larger lot- option now will provide control on disputes and ris$s in d"namic and ris$" real estate mar$et! &t is strongl" recommended to go with the larger lot option e icientl"! & the project involves greater ris$s and more wor$ it leads to wasting resources on ine icient activities! The compan" should ocus on gaining inancial success and dominance in the real estate mar$et through customer engagement and e*perience o emplo"ees developed over the "ears to generate sustaina#le competitive advantage!