Meadowlands Harvard Case Solution & Analysis


The company had proposed to build around 802 detached single family houses. The sales prices also seemed to fairly reflect the costs of developing the project. Most of the site was planned to be used for the development of Single-Family residential. Apart from this, the sources and the uses of the cash show that the uses of the cash are going to be positive as compared to the sources of cash in this case. The project costs and returns have been considered for 3 years. The net cash flow in the end gives us an internal rate of return of 36%. This shows that the proposed project is viable. The price of the land was set at $40 million. This price was based on several factors including the mixed uses and the greater density. The decision proposed by Dunlop to Sexton and Leonard was quite non satisfactory. This decision was related to option the property by paying $1 million deposit in good faith without the approval of the zoning board. The internal rate of return for the new community development project has been calculated in the appendix. The new internal rate of return for the company based on the expectations of Sexton and Leonard regarding the sales in the coming years is calculated as 214%. This is a very high rate which shows that this project is going to be successful. However, one thing to be noted here is that there are many assumptions made regarding the uses of cash. For example, the uses of cash relate to site improvements, carriage interests, road developments and the acquisition cost of $36 million for the land which would have to be paid in the first year. The sources of cash have also been added or deducted based on the debt and equity issue and debt and equity payment in the respective years. Finally, the profit before the deductions of the tax has been calculated. Some of the assumptions might be optimistic, however, these have been assumed keeping in mind the nature of the industry and the past experiences of Sexton and Leonard; therefore, they are going to be valid and justifiable. Based on the internal rate of return, the government, state officials and the residents of Mount County should approve this project because it is in the best interests of the society, children and adults as it will give a completely different experience.


Leonard and Sexton first of all need to make sure that they receive the financing for this proposed community development project. They should prepare a profitable and successful picture in the mind of George Dunlop who is the Martinsburg’s saving and loan banker. Sexton and Leonard have calculated the total costs related to the development of the projects. Secondly, Sexton and Leonard need to address the concerns of the residents. These concerns were related to the safety issues due to the narrow roads. Therefore, these two home developers should clarify it to the public that the safety issues would be resolved and how they would be considered as safe roads. The company should also change its marketing strategies related to the development of this project and clear the minds of those people who consider this as a marketing gimmick.......................................

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