02 Jan Professor’s Note

Module 1 discussion

CFO to CEO

There has been a trend across corporate America of promoting financial officers to CEO. What are some advantages and disadvantages of this practice? (Based on the article of Financial Managers and other reading you may have done)

Do research on the Internet and show the reference for the information. Don’t forget to respond to a colleague’s posting also.

Professor’s Note: In addition to searching the Internet for text related to this threaded discussion, please watch the following videos (click on the following link to access these videos) and post your comments.

http://www.youtube.com/watch?v=E2GxuhDRVYg David Mudrick – CFOs Becoming CEOs

http://www.youtube.com/watch?v=y5HkWah-bfs Ron Gaboury – CFOs Becoming CEOs

Grading Criteria: Try to add information not previously discussed by others. Please, provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and include references.

Module 2 discussion

Present Value

What is your personal discount rate or rate of preferences? That is, how much would you pay for a promise of $1,000 to be received one year from now? Would you discount it by 10%, 5%, etc?

Do research on the Internet and show the reference for the information. Don’t forget to respond to a colleague’s posting also.

Professor’s Note: In addition to searching the Internet for text related to this threaded discussion, please watch the following videos (click on the following link to access these videos) and post your comments.

http://www.youtube.com/watch?v=ks33lMoxst0 Introduction to Present Value

http://www.youtube.com/watch?v=4LSktB7Pk_c Present Value 2

http://www.youtube.com/watch?v=nScQsMmohZ0 Time value of money calculations using the TI BAII Plus calculator – part 1

http://www.youtube.com/watch?v=EocymirVokM Lesson TVM-10-060 – Clip 06 – PV of an Annuity Due – TI BAII Financial

Grading Criteria: Try to add information not previously discussed by others. Please, provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and include references.

Module 3 discussion

CAPM

Now that you have read about the CAPM, would you ever use it to make personal investment decisions? How can an individual investor use or think about CAPM?

Consider the following:

What is the main message of the CAPM? It evolves from the notion that investors in general aren’t stupid: They diversify their investment funds into a well-diversified portfolio. More specifically—the main message of the CAPM is that the rate of return one should expect to earn on a particular investment is only related to the systematic risk of the security, not to its total risk. When you purchase a stock (because you like it or because you got a ‘tip’), you’ll be exposed to the total risk of this stock, but the market theory implies that you’ll only be compensated for a small proportion of that risk. Hence, if you do like risk you should invest in a well-diversified risky portfolio with many securities having a high beta, rather in an individual stock. Now go back to the initial question and present your thoughts…

Do research on the Internet and show the reference for the information. Don’t forget to respond to a colleague’s posting also.

Professor’s Note: In addition to searching the Internet for text related to this threaded discussion, please watch the following video (click on the following link to access this video and further Part 2) and post your comments.

http://www.youtube.com/watch?v=LWsEJYPSw0k CAPM Capital Asset Pricing Model in 4 Easy Steps – What is Capital Asset Pricing Model Explained

Grading Criteria: Try to add information not previously discussed by others. Please, provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and include references.

Module 4 discussion

Net Present Value

How accurate do you think a company’s estimates of the net present value of a proposed project are? Refer to both the initial investment and to the components of the cash flow: revenues, operating expenses, depreciation, taxes, and the cost of capital to use for the computation of the present value.

Keep in mind that NPV is the value in today’s dollars of cash flows to be received some time in the future minus what we have to pay today to get those cash flows.

Which of the following do you think would give you the most accurate NPV calculation: (a) a brand new retail startup (b) a pharmaceutical company introducing a new drug (c) a company with a successful product in Chile trying to introduce it to the USA.

Do research on the Internet and show the reference for the information. Don’t forget to respond to a colleague’s posting also.

Professor’s Note: In addition to searching the Internet for text related to this threaded discussion, please watch the following videos (click on the following link to access these videos) and post your comments.

http://www.youtube.com/watch?v=jylJ2r9bklE Episode 99: How to Calculate Net Present Value

http://www.youtube.com/watch?v=uNcBWALtLHU What is NPV?

Grading Criteria: Try to add information not previously discussed by others. Please, provide factual information (not merely opinions) backed up by details or examples. Your comments should be in your own words and include references.

Module 4 Reflective Discussion

Given the readings and assignments in this course, identify and briefly discuss two important concepts applicable to your professional discipline. In other words, discuss what concepts you have learned that you feel you can personally apply to your career.