Metropolitan Housing Project Company

Metropolitan Housing Project Company

Historical and social Background:

On November 30, 1988, Mr. Roy Roxas, project manager of the Metropolitan Housing Project Company (MHPC) was preparing a Three-Year Plan for the period (1989-1991) for presentation to the Board on December 31, 1988. The MHPC was formed in 1982 to develop real estate properties for sale to the public

Housing Situation:

The first project undertaken by the company is the development of a real estate property located in Laguna called Lagunaville. The site is near the University of the Philippines campus in Los Baños, Laguna.

Project Manager:

Mr. Roy Roxas

Objectives:

1. To settle all liabilities relative to the project,

2. To increase the cash balance to P2.348 M

3. To complete site development and,

4. To sell all residential lots.

The above objectives could be accomplished with the following assumptions:

1. The purchasing power of the salaries of government employees is maintained at present level,

2. The Home Development Mutual Fund will take out some of our credit sales,

3. The availability of interim financing facility and,

4. The completion of the highway road leading to the site of Lagunaville.

Guide Questions:

1. As a member of the Board, evaluate the 3-year plan prepared by Mr. Roy Roxas.

2. What additional reports will you request Mr. Roxas to prepare in order to enable you to evaluate the feasibility of the 3-year plan.

3. If site development costs increase by 30% starting 1989 (and assuming no changes in the selling prices of lots), will the company encounter cash flow problems?

I. Central Problem

How can Metropolitan Housing Project Company come up with a solution to achieve the stated objectives, most importantly to pay their liabilities, whether to choose the Three-Year Plan of Mr. Roy Roxas or not?

II. Objectives

* Pay the liabilities of the project

* To sell the residential lots

*...