AMaheshwari_BUS560-BE_Module_5_07-16-2011

AMaheshwari_BUS560-BE_Module_5_07-16-2011 - Module51 Module5

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Module 5      1 Module 5 MBA in Finance (2011)
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Module 5      2 Abstract The topic of Business Ethics covers a wide range of topics.  The author through a few  citations attempted to cover brief areas on Leadership Skills, styles combined with  Ethics and Values. In author’s view, Leadership is the ability to lead. It is not a skill that  can simply be picked up from reading a book; leadership skills are gained through  experience,   things   such   as   public   speaking   or   organizing   an   event.   Author   also  described the meaning of leading from the middle, ethical leadership theory, a moral  leadership theory and his leadership style in terms of ethics.
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Module 5      3 Module 5 Deliverables Assignments:  Questions Question:  1.   How does ethics factor into thinking about finance as a method?  What key questions do managers need to ask as they perform a financial analysis  of a project? Response:  Finance as a method includes the valuation of decisions using such tools as  discounted cash flow, asset multiples, book value, market value, among others. Most  decisions are evaluated and supported by the valuation of different alternatives If you  are not creating the financial model you may be in the presentations or helping with the  inputs   and   assumptions.   Or   perhaps   you   are   executing   the   plan   and   being   held  accountable   to   someone   else’s   valuation.   The   most   common   valuation   method- discounted cash flow or DCF takes the projected cash flows of a project and converts  them in to present day value While other valuation methods such as replacement value  market   value,   multiples   and   so   on   exist   the   dominant   tool   used   in   organizational  decision   making   is   DCF.   Valuation   is   a   powerful   tool   in   weighing   options   the  summarization of entire future scenarios in to a single number can help simplify complex  decisions.
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Module 5      4 Not surprisingly the process of simplification in valuation encapsulates and hides  many small cha and large judgments. Taking the example of Boeing the present value of  the future cash flows of the project as described in the case in billions of dollars.  However, the assumptions and construction of the model say more about the project  than the statement, “this project will be cash flow positive in year four” The valuation of  the Boeing 777 project requires value judgment and reflects the ethics and values of the  corporation.   Within   the   organization   we   will   approach   finance   as   a   method   by  deconstructing the most common tool valuation. Our aim is to get inside finance and see 
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This note was uploaded on 12/08/2011 for the course MBA 520,510,59 taught by Professor Kate during the Spring '11 term at Asian Institute of Management.

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AMaheshwari_BUS560-BE_Module_5_07-16-2011 - Module51 Module5

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