IFM_IM_ch21-b - Chapter 21: Discussion in the Board Room...

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Chapter 21: Discussion in the Board Room 110 Discussion in the Board Room This exercise is intended to apply many of the key concepts to broad issues that are discussed by managers who make financial decisions. It does not replace the more detailed questions and problems at the end of the chapter. Instead, it focuses on broad financial issues to facilitate class discussion and simulate a board room discussion. It serves as a running case in which broad concepts from every chapter are applied to the same business throughout the school term. The exercise not only enables you to apply concepts to the real world, but also develops your intuitive and communication skills. There are several alternative ways in which this exercise is used in a course. 1. Apply it on a chapter-by-chapter basis to ensure that the broad chapter concepts are understood before moving to the next chapter. 2. Use it to encourage online discussion for courses taught online. 3. Use it as a review just before each exam, covering all chapters assigned for that exam. 4. Use it as a comprehensive case discussion near the end of the semester, as a means of reviewing the key concepts that were described throughout the course. 5. Use it for presentations, in which individuals or teams present their views on the questions that were assigned to them. This exercise has been placed on the course web site so that students can download it, and insert their answers after the questions. By the end of the course, the students will have applied all the major concepts of the text to a single firm. The focus on a single firm will allow students to recognize how some of their decisions about concepts covered in the earlier chapters interact with decisions to be made in later chapters. BACKGROUND One of the best methods of learning broad concepts in this text is to put yourself in the place of an MNC manager or board member, and apply the concepts to make financial decisions. Board members do not normally make the decisions that are discussed here, but must have the conceptual skills to monitor the policies that are implemented by the MNC’s managers. Thus, they must frequently ask themselves what they would do if they were making the managerial decisions or setting corporate polices. Consider the following business that you could easily create: a business that teaches individuals in a non-U.S. country to speak English. While this business is very basic, it still requires the same type of decisions faced by large MNCs. Assume that you initially establish this business in Mexico. Details of Your Business. You live in the U.S. You invested $60,000 to establish a business of a language school called EE (Escuela de Engles) in Mexico City, Mexico. You hire local individuals in Mexico who can speak English and train others how to speak English. You have a small subsidiary in Mexico, which has an office and an attached classroom that you lease. Clients can come to your subsidiary for a 1-month structured course in English, taught by your employees. You advertise in the
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This note was uploaded on 12/30/2010 for the course MBA FI565 taught by Professor Benard during the Spring '10 term at Keller Graduate School of Management.

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IFM_IM_ch21-b - Chapter 21: Discussion in the Board Room...

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