Steman Place - Rent or Buy

This case study is designed to have you apply time value of money concepts in a real world application. It also gets you to think about the types of financial decisions that many adults face for what is one of the largest potential purchases of their lifetime. Finally, it forces you to learn and use Excel as a fundamental tool of financial analysis.

The case study you will be analyzing is “Stedman Place: Buy or Rent”, a Harvard Business Review case. The case can be purchased here:

https://hbr.org/product/Stedman-Place--Buy-or-Ren/an/207063-PDF-ENG

The fundamental question that you will be answering is, which housing option is best for the Lindens? Your assignment consists of two parts:

a) The Excel spreadsheet you will use to compute the benefits and costs of the two options, taking all information given in the case into consideration, and;

b) The case writeup, in which you explain to the reader the problem faced, the particulars of the two options, and pros and cons of each. You will also state your recommendation, and carefully justify your decision, based of course on financials (though you may in addition add other factors that could come into play).

Some important case study recommendations:

• The goal of the case is to apply theoretical and analytical skills developed in the classroom to a situation that, while somewhat simplified, is highly correlated with actual events. You’ll find the cases to be vague, nebulous, open-ended, and (sometimes) without clear solutions. This will result in you feeling frustrated, annoyed, and lost at some point during your analysis. You’ll have to learn to deal with these emotions, as they reflect the nature of the world beyond the classroom.

• You’ll also have to convince the reader that your course of action is correct, using a well-reasoned argument supported by financial knowledge and quantitative analysis.

• You are responsible for sorting through the data, conducting a thoughtful, methodical