问题描述：
英语翻译
One of the cardinal errors of capital budgeting is to include both the financing and project decisions in the analysis of a specific investment.Obvi¬ously,this error is being committed by those who analyze real estate invest¬ments if they include in their analysis the mortgage financing available on the property.
The Inwood Method of analysis cited above includes the mortgage obligations in the calculation of both the annual net cash flows generated by a property and the net proceeds to be realized from the sale of the property at the end of the holding period.Does this invalidate the method of analysis?I think not.The financing of real estate investments is characterized by mortgage financing in which the terms available for a specific loan depend,to a significant extent,on the specific property being mortgaged.It is also true that individual mort¬gage loans are negotiated for specific properties and that very few unsecured loans or blanket mortgages covering all properties owned are available in the market.Therefore,it may be argued that because of the specific,direct and continuing ties between projects and their financing,one may be able to include in the analysis of a project the financing associated with it.The cost of capital to be considered in determining the net present value of the investment would then be the cost of equity capital as determined by the equity investors in the portfolio.
One of the cardinal errors of capital budgeting is to include both the financing and project decisions in the analysis of a specific investment.Obvi¬ously,this error is being committed by those who analyze real estate invest¬ments if they include in their analysis the mortgage financing available on the property.
The Inwood Method of analysis cited above includes the mortgage obligations in the calculation of both the annual net cash flows generated by a property and the net proceeds to be realized from the sale of the property at the end of the holding period.Does this invalidate the method of analysis?I think not.The financing of real estate investments is characterized by mortgage financing in which the terms available for a specific loan depend,to a significant extent,on the specific property being mortgaged.It is also true that individual mort¬gage loans are negotiated for specific properties and that very few unsecured loans or blanket mortgages covering all properties owned are available in the market.Therefore,it may be argued that because of the specific,direct and continuing ties between projects and their financing,one may be able to include in the analysis of a project the financing associated with it.The cost of capital to be considered in determining the net present value of the investment would then be the cost of equity capital as determined by the equity investors in the portfolio.
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