Financial and Environmental Impact Analysis of Sustainable Retrofitting

 

Final Team Project Instructions Assignment Objectives: "How to consult and advise government officials, attorneys, public interest groups, managers, executives and other relevant decision-makers regarding the economic and financial impacts of human projects on the environment." Assignment Description: This is a team assignment where each team member will contribute to developing the analysis and completing the final set of recommendations. In order to complete this assignment you will need to use the case study and spreadsheets, which are available in the links below. You will be performing a detailed analysis of the data. The assignment is due at the end of Week 10. The team assumes the role of Tricia Linimer, and will provide an analysis of the financial and environmental impacts of selecting various alternatives for sustainable upgrades to the Vintage Courts property. The team’s final product will be a 4000-5000 word paper that provides a set of summary recommendations for which specific sustainable retrofit projects should be implemented at the property. The team will use the framework provided in the spreadsheets. You will need to follow these steps in order to complete the project: 1. Download the case study KEL430 from the Harvard site. All students need to purchase Harvard Business case KEL430 available at a special discount from https://cb.hbsp.harvard.edu/cbmp/access/75957249 (Links to an external site.)Links to an external site.. (Expires July 31, 2018). 2. The required spreadsheet is not available from the Harvard link; instead, the spreadsheet file is provided here with permission from Harvard: KEL432-XLS-ENG completed original spreadsheet from Harvard.xls . 3. Perform a detailed reading of the case study. 4. The spreadsheet calculates the financial and environmental impact for what we will call "Scenario 1, Base Case". 5. Next, conduct research to determine revised (current) assumptions for the annual price escalation rates. These will be required for the second scenario. 6. Enter the revised (current) assumptions for the annual price escalation rates in the spreadsheet (Pro Forma tab). Only change these rates in the Pro Forma and not in other sheets; however, it will be necessary to modify the Pro Forma tables as additional projects become viable. This will be Scenario 2. 7. Once the two spreadsheet analysis are complete, the team will prepare a summary investment recommendations report (the paper).

Provide a succinct set of focused recommendations. As part of your team’s analysis and discussion, the team should include responses to each of the following questions: • Is a 9.5 percent discount rate appropriate? Why or why not? How do your recommendations change when you vary this rate? • Are the different annual price escalation rate assumptions for water, wastewater, gas, electricity, item replacements, and maintenance costs appropriate? Why or why not? How do your recommendations change when you change these rates? • Is the 7.5 percent increase in value (exit cap) over ten years a reasonable rate of value increase? Why or why not? • How do the environmental impacts of each option vary? How are they similar? • How do your recommendations provide a reasonable financial return as well as a positive overall environmental impact? Assumptions: Use the following assumptions for the Base Case scenario: Cost/Saving Type Price Escalation Water 2.0% Wastewater 1.5% Gas 2.5% Electricity 2.0% Lifecycle 3.0% Maintenance 3.5% Assignment Format: The paper must conform to Turabian 8th ed. and University College format and include at least five references in addition to the case study. Text citations must be used as appropriate. The content of the paper must be structured as follows: I. Title page II. Executive Summary (Note: an executive summary is not the same as an abstract Present hard facts succinctly that are important to executives, e.g., issues, results, recommendations, conclusions, implications) III. Table of Contents IV. Introduction (Background and Thesis) Be sure to cite the case study in presenting the background. V. Results V.i. Assumptions (discount rate, price escalations, and exit cap increases, etc.): Provide support (citations) for your assumptions and a table summarizing price escalation assumptions for each scenario (two scenarios suggested). V.ii. Environmental Impacts V.iii. Methods for Balancing Financial and Environmental Impacts of Options V.iv. Resource and Financial Savings for Each Scenario V.v. Decision Process for Selecting Projects to Pursue VI. Recommendations VI.i. List of project options to pursue for each scenario VI.ii. Scenario 1 Description: Include the following: (a) additional capital required, (b) net present value, (c) internal rate of return, (d) sensitivities of NPV and IRR against escalation rate assumptions, the discount rate, and exit cap, and (e) reduction of environmental impacts. VI.iii. Scenario 2 Description: Include the following: (a) additional capital required, (b) net present value, (c) internal rate of return, (d) sensitivities of NPV and IRR against escalation rate assumptions, the discount rate, and exit cap, and (e) reduction