| After completing this course, students will be able to: |
| • |
Explain the basic structure of a sale leaseback transaction |
| • |
Identify potential prospects for a sale leaseback |
| • |
Describe benefits and drawbacks of the sale leaseback transaction
for user/sellers and investors |
| • |
Identify some of the tax issues associated with a sale leaseback |
| • |
Describe the process for selecting a discount rate used by corporate
and non-corporate users |
| • |
Explain how the discount rate differs for corporate and non-corporate
users |
| • |
Define opportunity cost as it relates to using discounted cash flow
analysis |
| • |
Quantify the net present value (NPV) of continuing to own and occupy a
property for a specific period of time versus the net present value of the
cash flows associated with selling and leasing back that property for the
same period of time:
| 1. |
Calculate annual cash flows after tax for the continue-to-own alternative |
| 2. |
Calculate the sale proceeds after tax for the continue-to-own alternative |
| 3. |
Calculate NPV of cash flows for continue-to own-alternative |
| 4. |
Calculate cash flows after tax from the sale leaseback alternative |
| 5. |
Calculate net present value of cash flows |
| 6. |
Compare the two net present values |
|
| • |
Determine the sales price at the end of the holding period of the
continue-to-own alternative that would make the net present values of
the two alternatives (continue to own versus sale leaseback) |
| • |
Calculate the after-tax cost of funds raised by a sale leaseback (IRR
of the differential) |
| • |
Conduct an analysis of the sale leaseback transaction from a user's
perspective using a variety of Excel-based analysis tool |
