Developing a ten year capital investment plan for the Chesapeake Yacht Club

The Chesapeake Yacht Club (CYC) is a not-for-profit yacht club located on the West River in Maryland. In order to remain financially viable the CYC must maintain a certain level of membership. Lack of a long-term investment plan places the CYC at risk due to a decrease in membership resulting from an increase in fuel prices or failure to maintain and/or improve its current infrastructure. Our team identified five investment alternatives, based on CYC member preferences, by distributing a survey and constructing a value hierarchy. The investments that rank highest to the club members include the installation of new docks and the implementation of renewable energy, such as solar and geothermal, to reduce the impact of utility usage on the club´s revenue stream. Our team used decision theory and an integer-programming model to identify investment combinations that will provide maximum value based on a given budget. Using these investment combinations our team conducted sensitivity and risk analyses and then conducted a financial analysis for a twenty-year period. The results of these analyses have shown that renewable energies, such as solar and geothermal, are high-pay-off investment for the club. Using the aforementioned alternatives, methods and decision criteria, we developed a capital investment plan for the CYC that will safeguard their future financial viability.