📊 Scenario Modeling
Model the financial impact of lease decisions before you make them
📄 Select Lease
📋 Current Lease Summary
Monthly Rent
$12,500
Remaining Term
35 months
Expiration
Dec 31, 2027
Current Liability
$412,500
Current ROU Asset
$398,200
Remaining Payments
$437,500
🎯 What-If Scenario
🔄 Renewal Scenario Parameters
Current market suggests 3-8% increase
TI allowance from landlord
📊 Scenario Analysis Results
📋 Current Path
Let lease expire Dec 2027
Remaining Cash Outflow
$437,500
NPV of Payments
$398,456
Ending Liability
$0
VS
🔄 Renewal Scenario
5-year renewal with 5% increase
Total Cash Outflow
$1,247,500
NPV of Payments
$1,089,234
New Lease Liability
$687,450
💰 Financial Impact Summary
Day 1 Remeasurement
New Lease Liability:
$687,450
ROU Asset Adjustment:
+$314,250
Annual Lease Expense
Current:
$150,000/yr
After Renewal:
$157,500/yr
Increase:
+$7,500/yr (+5%)
Balance Sheet Impact
Assets Increase:
+$314,250
Liabilities Increase:
+$274,950
📒 Day 1 Journal Entry (Modification)
| Account | Debit | Credit |
|---|---|---|
| ROU Asset - Operating Lease | $314,250 | |
| Lease Liability - Operating | $274,950 | |
| Lease Incentive (TI Allowance) | $25,000 | |
| Prepaid Rent (Free Rent) | $14,300 | |
| Total | $314,250 | $314,250 |
📅 New Amortization Schedule (First 12 Months)
| Month | Payment | Interest | Principal | Liability Balance | ROU Amortization | ROU Balance |
|---|
🎚️ Sensitivity Analysis
How does the NPV change with different assumptions?
| Scenario | NPV | Change vs Base |
|---|---|---|
| Base Case (5% rent increase) | $1,089,234 | - |
| Negotiate 0% rent increase | $1,037,890 | -$51,344 (save 4.7%) |
| 3-year term instead of 5 | $698,456 | -$390,778 (save 35.9%) |
| Get 4 months free rent | $1,063,234 | -$26,000 (save 2.4%) |
| 8% rent increase | $1,128,567 | +$39,333 (cost 3.6% more) |