Grennell Farm

In: Business and Management

Submitted By bcaatienza22
Words 489
Pages 2
CASE STUDY:
Grennell Farm
(President and Fellows of Harvard College)

BACKGROUND | Grennell Farm is a corporation that is engaged in the production of wheat. Located in Iowa, the 2,000-acre farm was established by Jeremiah Grennell more than 20 years ago. The sudden demise of its founder has led the farm to be transferred to the leadership of, Mr. Grennell’s niece and chosen heir, Denise Grey. She was informed of her inheritance early in 2010.

Ms. Grey works as an AVP in the consumer credit of a large New York bank. With the huge distance between Iowa and New York, she is carefully studying the advantages and disadvantages of retaining the farm’s ownership. | POINT OF VIEW | Third Person (Consultancy) | STATEMENT OF THE PROBLEM | Should Denise Grey sell the farmland at its current valuation or retain the farm as its investment? | AREAS OF CONSIDERATION | 1. Favourable increase in present Farm Commodity Prices 2. Profitability of the Farm 3. Appreciation of Farmland 4. Distance 5. High Liquidity that is available for credit | ALTERNATIVE COURSES OF ACTION | 1. Retain the farm land as investment | | ADVANTAGES | DISADVANTAGES | | 1. Favorable Price Fluctuation 2. Profitable farm 3. High Appreciation of Farmland | 1. Huge Distance from farmland to workplace2. Low extra liquid be available for credit | | 2. Sell the Farmland | | ADVANTAGES | DISADVATAGES | | 1. Eradication of problem with distance 2. High Extra Liquid Assets for Credit | 1. Unable to profit from price fluctuation2. Opportunity Cost of letting go of the farm’s profitability3. Not able to maximize Farmland appreciation | RECOMMENDATION | Denise Grey should retain the farmland with the combination consideration of Price fluctuation, profitability, and appreciation of the land to reap a total economic profit of 2.22 million…...

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