Recently Fantastic University undertook a building project which required $6.5 million of capital. The university
had endowment funds of more than $1.5 million and a triple A bond rating. After careful consideration, the Board and Management decided to finance the project through operations rather than using the endowment or borrowing the funds. As an investment analyst, critique this decision. Evaluate the pros and cons and determine if this was the best decision. Is there any information missing which makes this decision difficult? As a result of this decision what other tactical decisions might need to be made in terms of future staffing, raises, other capital projects?