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Case
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Reference no. HKS1124.0
Authors: F M Scherer
Published by: Harvard Kennedy School
Published in: 1992
Length: 6 pages

Abstract

When administrators at the Harvard Business School begin a major capital improvement program, they must make a key decision about one of the school''s most important and imposing buildings. Baker Library, built in 1927, has, despite the severity of New England winters, no storm windows on any of its 386 windows, many of them of gargantuan proportion. Should storm windows be installed? This case allows for application of the principles of capital investment analysis in a straightforward but realistically complex setting. Among other things, students must analyze benefits that vary over time and test the sensitivity of their conclusions in relation to uncertain future energy prices.

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Abstract

When administrators at the Harvard Business School begin a major capital improvement program, they must make a key decision about one of the school''s most important and imposing buildings. Baker Library, built in 1927, has, despite the severity of New England winters, no storm windows on any of its 386 windows, many of them of gargantuan proportion. Should storm windows be installed? This case allows for application of the principles of capital investment analysis in a straightforward but realistically complex setting. Among other things, students must analyze benefits that vary over time and test the sensitivity of their conclusions in relation to uncertain future energy prices.

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