FNCE 623 Financial Management Individual Assignment 1
The objective of this assignment is to provide students with the opportunity to perform practical application of time value of money concepts, to research relevant facts in performing qualitative and quantitative analysis, and to be able to apply quantitative reasoning, critical and creative thinking, and communication, and problem-solving skills. For this assignment, you will be reading the case ‘Time Value of Money: The Buy Versus Rent Decision, research relevant facts, perform analysis, and document your findings, analysis, and recommendation in a written report for Rebecca Young.
This assignment carries 20% of the grade.
For the assignment, we will be using the case: ‘Time Value of Money: The Buy Versus Rent Decision
You can purchase the case, search (9B14N024) (digital download) at https://www.iveycases.com.
Update: Instead of 4% quoted annual rate in page 2 line 4 of the case, we will use 2% APR semi-annual compounding.
Report Submission Instruction:
Maximum 4 pages excluding Reference/Appendix. You may consider using Refernce/Appendix section to include your research references, calculations, relevant graphs, charts, illustrations, and tables, and embed excel sheet file if you are using it to analyse.
Report due date and time: 7 Nov 2021 23:59 Hour Pacific Standard Time
Report must be submitted in Week 4 Turn-it-in link Assignment 1 Due 7 Nov – Submit Here. Submission by email will not be accepted.
A separate link Assignment 1 Submit Excel File here (if any) will be provided if you want to submit your excel file, if any available. Report submission by email will not be accepted.
Please include the statement with your signature in your paper: I agree that the work in this assignment is my own work and that I have given credit to all sources of information used in my assignment by including citations and references in the APA format. I acknowledge that I am expected to exercise the utmost academic integrity in all work submitted for this course. SIGNATURE: Your name
Report Expectation: Your report should cover 3 main sections. You may follow the pointers below or decide your own approach where appropriate.
1. Findings and Assumptions
Facts from the case, expectation of future real estate prices (rent/buy), cost of borrowing, opportunity costs, cost of buying/selling, economy, etc.
The case was prepared in 2015. What would be your findings of the market situation in 2021?
Describe your assumptions, if any.
2. Analysis
Calculation of monthly mortgage payment, outstanding mortgage balance
Cost/Payments to be considered in buy decision vs. rent decision
Scenarios analysis (Condo prices, interest rates, etc.)
Other factors such as qualitative benefits and costs
3. Recommendation
What recommendation(s) would you suggest to Rebecca Young and why? What would be Rebeccas next course of action?
