Volume 33 CONTENTS Spring 2007
The Undergraduate Finance Curriculum in the New Millennium: A Comprehensive Survey
Thomas Root, John Rozycki, Jimmy Senteza and Inchul Suh
The finance curriculum is a dynamic entity that should be continually adapting to changes in the marketplace. This paper develops a comprehensive database of information on the undergraduate finance curriculum at United States universities and colleges, and uses this database to characterize the current state of the finance curriculum. The authors find that the accreditation status of the University does make a difference in the level of finance coverage. Additionally, across all schools the finance curriculum appears to have been slow to reflect recent changes in the financial marketplace.
Embedded Class Assessment of an Executive MBA Core Financial Management Course
Larry C. Holland
This paper provides an example of embedded class assessment for a core Financial Management class within an Executive MBA program at a mid-western regional university. This particular example of embedded class assessment was implemented in a 10-step process. The course design includes 19 Learning Outcome Statements, which are assessed through exams and assignments. Some experiences and advice are also provided as a result of implementing this assessment process.
Using the Bloomberg Professional System for Finance Classes
Thomas S. Coe
In recent years, business schools have made sizeable investments in technology that provide students with instruction and experience in collecting, processing and communicating information as well as other skills that are transferable to the workplace upon graduation. A growing number of schools already have invested or are considering an investment in the Bloomberg Professional System as a tool for students in various finance classes. This subscription service, provided by Bloomberg L.P., provides a wealth of information that can be illustrated for many topics covered in undergraduate and graduate courses. This paper identifies potential applications for illustrating the financial data available through a Bloomberg subscription and presents the potential benefits to a university for investing in Bloomberg compared to traditional reference materials that have been part of many university library holdings.
Apex Productions: An Exercise Introducing Students to Uncertainty in Decision Making
David L. Schwarzkopf and Elliott S. Levy
This two-part exercise introduces students to the role uncertainty plays in managerial decision making and helps students develop valuable skills in analyzing and communicating the effects of uncertainty. Part I focuses on analyzing cost structures to illustrate how a company’s mix of fixed and variable costs reflects the firm’s reaction to uncertainty and affects management’s decisions. Part II requires students to forecast the company’s results one year into the future, using a software application to take into account the uncertainties involved in the estimates. Students see the effects of uncertainty on the likelihood that the firm will achieve its goals for growth. Both parts require that students make decisions for the company and defend those decisions with quantitative analysis. Classroom discussion highlights connections between internal operations and market expectations, and between management choices and effects on stakeholders.
Establishing Linkages to an Introductory Finance Course in Real Estate Electives
Herman Manakyan and Sean F. Reid
The paper outlines a useful teaching strategy to transition students into undergraduate finance elective courses in real estate by expanding concepts more fully developed in an introductory finance course. Two foundational concepts, dividend discount and price-to-earnings valuation, are applied to real estate valuation through the illustrative example of the market for residential investment (rental) property. The technique affords the opportunity to introduce the concepts of earnings growth rates, relative risk, and differentiation between the two primary sources of value in real estate investment: yield and capital appreciation.
George Tanaka’s Coffee Farm
Brian A. Maris
George Tanaka’s coffee orchard is declining in productivity due to the age of the trees and a parasite infestation (root nematodes). To restore productivity, it is necessary to replant with trees grafted to nematode-resistant rootstock. To further enhance output, he must first have the soil prepared, which requires extensive work with a bulldozer. George must determine whether or not it is worthwhile to invest more than $10,000 per acre and lose one year’s output to increase the future output of his orchard.