The Context

Maria Yamada is a 40 year old woman with three children, ages 3, 6 and 8. Her husband, Timothy, who is five years older than her, was recently laid off from a large corporation. At this time his job prospects look bleak since his career was oriented toward an industry which has been adversely impacted by the recent recession. Maria holds the Chartered Financial Analyst designation and has recently accepted a position as the Treasurer of Gamma Health Care, a large organization based in downtown Charleston that specializes in providing healthcare services to residents in Charleston and its environs. Until recently, Maria worked for 5 years for a large financial firm in St. Louis where he had a variety of clients. Maria was tired of the long hours and the two hours commute to work while working in St. Louis. She believes that working in the Charleston area would be relatively stress-free and that the hours would be more predictable.

Yamada's Decision Problem

The Yamada family is relocating to the Charleston area and plan on purchasing a 4 bedroom 2.5 baths home but is undecided on which area to buy their new home. After a considerable house hunting, the family narrowed down to homes in the following areas: James Island, Mt. Pleasant, and West Ashley. The family has a budget of $450,000 and is capable of making up to 15% down payment on their new home.

Required

A. Where should the family buy their new home and how much down payment should they make?

B. Identify at least three alternatives location that the family should consider. Discuss the alternatives and factors that the family should consider in making their decisions.

C. What should the family do? Explain why the alternative that you selected might be preferable to the others