Profit-Type menu

This menu allows you to choose the way Prodev handles profit reporting.

Show IRR

When ticked this will include an IRR (Internal Rate of Return) calculation in the appraisal statistics.  This is switched off by default.  When used, an additional row of numbers will appear at the bottom of the cashflow report (NPV/IRR Balance) showing the periodic balances used in the calculation.

Evaluate to Profit on Cost

All Residual and Sensitivity calculations will be based on Profit on Cost (this is the default setting).

Evaluate to Profit on Sale

All Residual and Sensitivity calculations will be based on Profit on Sale.

Evaluate to IRR

All Residual and Sensitivity calculations will be based on IRR (only available if ‘Show IRR’ is active).

Enter NPV Rate

Allows you to enter an annual Net Present Value Discount rate used to calculate the Net Present Value.  When used, an additional row of numbers will appear at the bottom of the cashflow report (NPV/IRR Balance) showing the periodic balances used in the calculation.

Remove NPV

Removes the Net Present Value Discount rate and statistic.

Include Interest in NPV/IRR calculations

This option can include the cost of interest in Net Present Value and Internal Rate of Return calculations if required.  NPV and IRR calculations should exclude the cost of interest by default although there are instances where it may be valid to include interest.  If in doubt leave this item un-ticked.

Equity Method

There are two choices, Lender Priority and Side by Side.  You can only select one of these so whichever one you select will automatically deselect the other.  The default setting is Side by Side.

Equity is explained in detail in the section ‘Time/Finance’ under the heading ‘Entering Equity’.  Lender Priority was the only method available in older versions of Prodev therefore when opening older version appraisal files, the method will be set as Lender Priority for compatibility purposes.  Any newly created files will be set to the default value of Side by Side.