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:
o Instead of $600,000 purchase price, we will use $700,000.
o Instead of 4% quoted rate, we will use 4.5% 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: 8 May 2022 23:59 Hour Pacific Standard Time
• Report must be submitted in Week 4 Turn-it-in link “Assignment 1 Due 8 May - 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:

To prepare your report, you may follow the pointers below or decide your own approach where appropriate.

1. Facts from the case, research findings and assumptions

• Facts from the case, expectation of future real estate prices (rent/buy), cost of borrowing,
opportunity costs, cost of buying/selling, current economy, demand and supply factors, etc.
• The case was prepared in 2015. What would be your findings of the current market situation?
• Describe your assumptions, if any.

2. Analysis
• Calculation of monthly mortgage payment, outstanding mortgage balance.
• Opportunity cost to be considered in purchase decision vs. rent decision.
• Scenario analysis (Condo prices, potential interest rate changes, etc.)
• Qualitative considerations, in addition to quantitative analysis performed above.

3. Recommendation
• What recommendation(s) would you suggest to Rebecca Young and why? Rent or buy?
 Assignment 1 Rubric
Grading Criteria Grade Grade
Description
• Did not submit the assignment Fail 0-59% F
• Unacceptable performance in most or all of grading criteria

• Demonstrated acceptable knowledge and understanding of concepts Pass 60%-67% C

• Use of facts in the case to perform analysis and offer recommendation
• A reasonable attempt made with improvement needed

• Demonstrated acceptable knowledge and understanding of concepts in Satisfactory 68%-71% B-

average level of performance
• Use of facts in the case to perform analysis and offer recommendation, with
reasonable justification
• Relevant quantitative and qualitative factors considered with demonstrated
calculations
• Attempt made in scenario analysis, A structured written report

• Demonstrated substantial knowledge and understanding of concepts at Good 72%-75%% B

average to above average level of performance 76%-79% B+
• Use of facts in the case to perform good quality analysis and offer
recommendation, with reasonable justification
• Relevant quantitative and qualitative factors considered with demonstrated
calculations
• Performed scenario analysis
• Performed adequate research work with logical approach in offering
reasoning and recommendation
• Good quality, structured written report

• Demonstrated comprehensive knowledge and understanding of concepts in Very Good 80%-84% A-

above average level of performance
• Use of facts in the case to perform high quality analysis and offer
recommendation, with reasonable justification
• Relevant quantitative and qualitative factors considered with demonstrated
calculations
• Performed scenario analysis
• Performed high quality research work with critical thinking and logical
approach in offering reasoning and recommendation
• High quality, well-structured written report

• Demonstrated comprehensive knowledge and understanding of concepts in Excellent 85%-89% A

high level of performance
• Use of facts in the case to perform rigorous analysis and offer
recommendation, with reasonable justification
• Relevant quantitative and qualitative factors considered with demonstrated
calculations
• Performed scenario analysis
• Performed thorough research work with critical and creative thinking and
holistic approach in offering reasoning and recommendation
• Excellent quality, well-structured written report

• Demonstrated exceptional knowledge and understanding of concepts. Exceptional 90%-100% A+

Exceeded performance expectations in all grading criteria