Cases in Finance Final Assignment
BBA321 Cases in finance Task brief & rubrics
FINAL ASSIGNMENT (100% of the final grade)
You must answer all the questions in the proposed business case.
LAUNCH: WEEK 5 / DELIVERY: 20 SEPTEMBER, 2020, 23:59HRS ON MOODLE
Submission file format: Excel document with all the answers, clearly identifying all four projects and showing the present values of the cash flows as well as
explanations when needed. Clearly provide all the assumptions which you take to solve this case.
For this Final Assignment (individual), the students must carry out the following work:
Read the case “Ligthing the Way at the Manor House Hotel”, and calculate the present value among the four types of bulbs. Determine which bulb
you would choose and why.
The structure of the work will be built around the following elements:
1. Excel table showing the calculation of the present values of the four alternatives as well as the assumptions taken (20 pts each = total 80 points)
2. Summary of the present values and choice of the bulb (20 pts)
Show all your calculation.
Be precise and provide numbers to support your analysis.
Create a specific tab in your Excel file with only the final answers (i.e. the four present values and the bulb chosen)
Please see EUBS’s recommendations for avoiding plagiarism, located in the BBA Student Guidelines.
Rubrics
Descriptor
9-10 Student demonstrates excellent understanding of key concepts and
uses vocabulary in an entirely appropriate manner.
8-8.9 Student demonstrates good understanding of the task and mentions
some relevant concepts and demonstrates use of the relevant
vocabulary.
7-7.9 Student understands the task and provides minimum theory and/or
some use of vocabulary.
6-6.9 Student understands the task and attempts to answer the question
but does not mention key concepts or uses minimum amount of
relevant vocabulary.
3-5.9 The student demonstrates insufficient understanding of the concepts.
They may mention some relevant ideas or concepts, although it is
clear that the relationship between them is not understood by the
student.
1-2.9 The student demonstrates insufficient understanding of the concepts
and does not mention any relevant ideas or concepts.
0 The student leaves the question blank or cheats.
© Damian Hunt and Christine Clarke 201
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A Student’s Guide to Case Studies
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CONTENTS
1. Introduction …………..
2. The Case Study …………..
3. Working On Cases …………..
4. Initial Analysis …………..
5. A Suggested Approach …………..
6. Using Cases In Class …………..
7. Preparing A Report …………..
8. A Practical Case …………..
9. Conclusions …………..
10. References …………..
Appendices …………
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1. INTRODUCTION
The aim of this brief document is to help you get the best from the case studies that you will use on your
Degree or Masters programme. It covers: –
The role of the case study in management programmes
Individual analysis of cases
Group case discussions
Writing up case studies
This document should not be regarded as prescriptive since there is no one best way of analysing a case.
Interspersed within the document are boxed checklists drawn from several sources (see references on page
13) on different aspects of case work. These provide some summaries or additional perspectives on the points
made in the document.
2. THE CASE STUDY
The case study or case is an important learning vehicle on all Business programmes. It provides the basis for
the identification of issues, the analysis of problems, the development of solutions to these problems and for
the consideration of the difficulties in implementing these solutions.
Skills development by the case method
Analysis
Application
Creativity
Communication
Social skills
Self-analysis
We learn through cases in two main ways. First, through our individual analysis of the case and, second,
through the subsequent discussion of the issues raised by the case and fellow students.
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Within your course some cases are studied on an individual basis as activities within a course and for
assignments and examinations. There are also opportunities to discuss cases with fellow students and your
tutor during classes.
Action skills reinforced by case studies:
Thinking clearly in complex, ambiguous situations (there may be many valid
perspectives).
Devising reasonable, consistent, creative action plans (suitable, feasible, and acceptable to those
concerned).
Applying quantitative tools.
Recognizing the significance of information (what is vital, useful,
insignificant, irrelevant?).
Determining vital missing information.
Communicating orally in groups ( incorporating the views of others).
Writing clear, forceful, convincing report
3. WORKING ON CASES ON YOUR OWN
Case Study analysis
Most people find it helpful to tackle a case study by first reading it through quickly to gain an overall
understanding of the situation described. This is followed by a detailed examination of the case issues during
which notes should be taken.
Case studies vary considerably. They may contain very little detail or a seemingly baffling amount. They
may cover a broad range of issues or alternatively focus on specific management problems. Sometimes the
problem for analysis is obvious, sometimes it is not.
A case study rarely contains all the information one would like. However, as managers you will be frequently
expected to deal with situations in which you have incomplete information. Where information appears to be
lacking, you have to make assumptions, taking care that these are reasonably justified. Numerical
information, where provided, should always be used.
Case studies rarely have right or wrong answers. Answers may be good or bad but this depends to a great
extent on the supporting arguments and the use made of available information. The lack of right or wrong
answers can lead some students to feel frustrated. Remember, there are very few clear cut, right and wrong
answers to Business problems in the real world.
Some problems students find with case learning:
Cases have no unique answer
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Information is ambiguous and contradictory
The issues are not stated ( the task may be to identify the issues)
Information is redundant and irrelevant
Tutor does not solve the case
Case teaching is inefficient
Note taking is difficult
Tutor is not directive in discussions
(he/she may want to teach self reliance)
Learning how to cope with complex and ambiguous situations
You may feel that case studies are a rather cumbersome way of learning. Whilst less factual knowledge may
be gained from analysing a case study than can be acquired from reading a text book or listening to a lecture,
this is not the main purpose of a case study. Its key role is to provide a simulated business situation within
which course concepts and approaches can be applied, their practicability assessed, and greater insights into
business issues developed.
4. INITIAL ANALYSIS TECHNIQUES
In essence, the first thing that you are attempting to do in case study analysis is to identify, as far as is possible,
what the position of the company is at that time (and, if necessary, for the time scale of the case).
There may be a specific focus depending on which aspects of the course are being explored, but the initial
analysis should always take into account the following, if at all possible:-
You should seek to understand the relationship between the subject organisation and the environment
in which it operates. This will include both the short term (competitive environment) and the
longer term (Sociological, Technological, Economic and Political environments; STEP
factors).
You will need to assess the organisation’s capabilities – the integration of human, physical and financial
resources.
You will need to examine how effective these capabilities are being utilised and whether they are being
developed to meet expected future conditions.
You will be interested in the organisation’s recent performance, present position and future
prospects.
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You will need to address the specific tasks contained within the case study brief, whether this be for
assignments, class discussion or examination.
5. A SUGGESTED APPROACH
Framework for case analysis
COMPREHEND 1. Read case quickly to understand the situation.
CASE SITUATION 2. Read case again, making notes, highlighting
etc.
DIAGNOSE PROBLEM 3. Identify problem areas.
OR SITUATION 4. List facts about the problem from notes taken.
STATE PROBLEM 5. State major problems.
OR SITUATION 6. State minor problems.
GENERATE 7. List solutions to major problems.
ALTERNATIVES 8. List solutions to minor problems.
EVALUATE ALTERNATIVES 9. List advantages and disadvantages of alternative
solutions
10. Evaluate advantages and disadvantages and select the
best alternative.
DEFEND IMPLEMENTATION 11. List questions about the workability of solutions.
12. Develop a defence for each question listed.
PREPARE REPORT 13. See section on writing reports.
In essence, case analysis has three stages.
1. Overview.
2. Analysis.
3. Synthesis.
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You should start with a broad look at the situation overall, break it down into component parts for detailed
examination and, finally, move to synthesis, the combining of separate elements into a coherent whole, of
which you should by then have a better understanding.
6. USING CASES IN CLASS FOR GROUP DISCUSSION
Discussing cases with other students, managers and/or tutors adds valuable additional dimensions to working
with case studies. Most important of these, perhaps, is exposure to a range of different ideas on case issues
that colleagues can bring to the discussion.
If the potential for group discussion is going to be realised, it is clearly important that all participants have
thoroughly analyzed the case material in advance.
The Dos and Don’ts for case discussion
Dos: Prepare before class
Push your ideas
Listen to others
Keep an open mind
Relate past experience
Relate to past cases
Be provocative
Bring in outside research
Prepare special items (handouts etc)
Recognise the flow of the discussion
Prepare the lead off
questions
Be Constructive
Be brief
Take the offensive
Evaluate your own participation
Don’ts: Don’t make sudden changes of topic
Don’t repeat yourself
Don’t repeat what others say
Don’t use unfair hindsight
The structure of case discussions:
Case discussions can be structured in a number of ways. The following are common and may be combined
in successive stages.
Small groups discuss the case situation, with or without tutors
questions
Students or groups present an analysis or recommended course of action to
the class for discussion.
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The tutor leads the discussion on the case, drawing out certain points relevant
to the course.
Tutors vary in the way they run case discussions. Some will adopt a “hands off” approach, leaving the
direction and scope of the discussion up to the students, intervening only to facilitate discussion. Others may
wish to guide the group more actively in order to achieve specific learning objectives.
Some questions tutors ask about cases:
Question Focus
What do you regard as the
main issues in this case Issue identification
What did you notice about … Attention drawing
What other examples are there of … Generalise
from the particular
What action would you recommend … Problem solving
What resources are required Feasibility studies
What difficulties might there Suitability,
be in implementing your acceptability and
recommendations potential problem
analysis
What other options are there Generate alternatives
How do you feel about Attitudes, opinions
What is happening in Drawing attention
the group right now group processes
Group Discussions, important points:
In order to get the best from group discussion of cases the following points should be kept in mind:
During discussions expect and tolerate challenges to your opinion.
Be prepared to put your conclusions up for scrutiny and rejection.
State your views without fear of disapproval.
Overcome your hesitation to speak.
Remember that good communication is essential in persuading.
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Remember that the group’s views are not always correct. In management there is always room
for individuality, originality, unorthodoxy.
Always try to contribute, not just talk or listen.
Always prepare the facts beforehand.
Don’t be afraid of making decisions on the available information, but do be willing to justify
assumptions that you have made.
Students’ responsibilities in case learning and discussion:
1. Experience case studies.
2. Enjoy the case discussion.
3. Help manage the case discussion.
4. Master the facts before the discussion.
5. Analyze the case before the session.
6. Tolerate the tutor (tutors’ approaches to cases differ).
7. Respect your colleagues.
7. PREPARING A REPORT
The final structure of the report will depend on the nature of the task, eg Marketing, Financial, Strategic etc,
and will, of course, depend on your tutor’s requirements. Below is a report outline which you may find
helpful (but not prescriptive).
1. A TITLE PAGE
1.1 This should show:
1.1.1 The Title
1.1.2 Your name
1.1.3 An explanation of who the report is for, eg “A Report for (tutor’s name/ name of
manager)”.
1.1.4 The date.
2. CONTENTS LIST
2.1 This should show:
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2.1.1 the full list of sections within the report (including any appendices, references or
bibliographic lists; etc.)
2.1.2 the page number on which each section begins.
3. A SUMMARY
3.1 A one page summary which outlines, in no more than three short paragraphs (and
preferably just one), what the report says.
3.2 You should write this last.
3.3 It should be in the third person and present tense, eg “The report considers the arguments
in favour of Quality Circles and makes recommendations about their adoption.”
4. AN INTRODUCTION
4.1 This should give a succinct explanation of the aims/context of the report and should include
brief details of any information necessary for the reader to understand it, eg. company size;
main activities;
etc.
5. THE MAIN BODY OF THE REPORT
5.1 This is where you present your main account of the problem or issue you are writing about.
5.1.1 It should be based on analysis, not on intuition, eg avoid writing “I feel…..”
5.1.2 You should back up what you write with evidence and/or argument. This means:
5.1.2.1 you must substantiate each assertion you make with evidence, eg
extracts from an annual report, a staff survey, recent appraisals, etc.
5.1.2.2 you must support opinions with specific examples/evidence (eg. from a
consultant’s report), or by building a logical argument based on
previously cited examples/evidence.
5.1.3 You should make a clear distinction between objective facts and personal
opinions.
5.2 Ideally this section should be divided into numbered paragraphs which, like this briefing
sheet, show which section the paragraph belongs to.
5.3 Headings for each sub-section, underlined or in bold (as used here) are a good idea.
5.4 Consider presenting material in the form of diagrams, charts etc., wherever appropriate.
These are not only easier to grasp, but reduce the word count.
6. CONCLUSIONS
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6.1 This is where you sum up the general conclusion/s you have reached, such as “The very
low morale is a result of an autocratic management style”.
6.2 Don’t confuse conclusions (where you draw together the threads of the preceding
discussion to make some overall point/s) with recommendations (where you say what
should be done about the conclusions you have reached).
6.3 It is sometimes a good idea to present your conclusions in the form of a bullet list, like this:
Conclusion 1
Conclusion 2
etc.
7. RECOMMENDATIONS
7.1 This is where you list the actions which your conclusions lead you to believe are necessary,
e.g. “The team leader should attend a course in modern approaches to management”.
7.2 The recommendations must be based on the analysis and conclusions.
7.3 Wherever possible you should include a clear indication of:
the priorities
the timescale/deadline for completion
who is to be responsible for taking and/or monitoring the
recommended action
to whom any action should be reported
from whom authorization must be sought
the financial budget or source of funds
other cost/resource implications
etc.
8. The List of References
8.1 This is the list of sources referred to directly in your report. If you have mentioned a writer
or a book (even a course book) you must give full details here of
the title
the writer/s or editor/s
the publisher
the date of publication
9. The Bibliography (if any)
9.1 The bibliography is where you list details of any books or other sources you have consulted
in preparing your report which you think would be useful for your reader to know about or
be able to consult. You should give the details outlined in the section on references above.
10. The Appendices (if any)
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10.1 This is where you place any information whose inclusion is not central to the main body of
the report but which explains, amplifies or puts in context the arguments and evidence you
have presented
there.
10.2 Its main purpose is to allow you to include important information which, if it were included
in the main body of the report, would interrupt the flow of the argument you are developing
there.
10.3 Any material in an appendix does not normally count towards the marks except in certain
specific cases e.g. finance.
10.4 Examples of material suitable for an appendix include:
sets of complex figures or statistics
supporting documents, e.g. extracts from company reports
etc.
8. A PRACTICAL CASE
Read the following case study and jot down those issues which you think are important. Notice how many
issues cross functional boundaries.
Oxford Machinery plc
Last May, Mike Craven, Managing Director of Oxford Machinery plc, called a meeting of his senior managers
to discuss an important product improvement recently introduced by an overseas competitor, Toho Inc.
Oxford Machinery’s products were specialised filling and sealing machines which were manufactured and
sold to the worldwide chemical and food industries. Total sales were about £50m per year. The key closure
elements in the machines were manufactured of a special, unique steel alloy which Oxford Machinery
purchased under an exclusive contract. The company’s advertising and sales promotion had consistently
stressed the high quality and long life which these alloy parts gave to its machines. Company executives
stated that the use of the special steel gave Oxford Machinery’s products a strong competitive advantage. So
far no competitor had been able to match the characteristics of the special steel and Oxford Machinery held
about 40% of the world market for the type of machine it sold to the chemical industry and 30% for the type
of machine for the food industry.
Earlier, Toho Inc. had launched a line of competitive filling and sealing machines for the chemical industry
which substituted a new, high-impact composite material for the crucial steel elements. Toho claimed
improved quality, faster speeds and longer life for its machines than for the comparative Oxford machines.
Moreover, Toho’s machines were priced at nearly 20% less than Oxford’s.
Mike Craven obtained one of the new Toho machines and had it thoroughly tested by the quality control
department. The tests indicated that the composite parts of the Toho machine produced fewer rejects than the
comparable Oxford machine. In addition, the composite parts enabled the Toho machine to run efficiently at
150% of the rate of the Oxford machine without jamming. Moreover, the composite parts did not break down
until 50 million operations, compared with an average of 30 million for the Oxford steel units.
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The Sales Manager insisted that Oxford Machinery should duplicate the performance of the Toho machine
by developing similar composite parts.
The Director of Engineering indicated that she could produce the necessary substitute parts within two
months, and estimated the cost of the composite parts would be about 40% of the existing steel component.
She estimated it would take another two months to get into full production.
Craven was not convinced that Oxford Machinery should merely copy the Toho parts and substitute them in
their present machines. He suggested that perhaps Oxford Machinery should re-design its entire chemical
line, incorporating composite parts, but also including other improvements. The Director of Engineering
suggested that it might also be possible to utilize the new composite material in the other machines.
The Sales Manager urged that a full-scale new product development programme be undertaken but that, in
the meantime, the existing line should incorporate elements similar to Toho’s as soon as possible.
Oxford Machinery had a stock of 96 of the special steel units for the chemical industry which cost £192,000,
and a stock of the special alloy raw material, which would make another 180 units and cost £288,000. All of
this would be of no value if the company shifted completely to composite elements. Oxford Machinery sold
about eight machines a week to the chemical industry, at an average price of £50,000, and a similar number
of machines to the food industry. The cost of the special steel elements in either of these machines was
approximately £2000.
The costs of a typical Oxford machine for either the chemical or food industry were as follows.
£
Materials and parts 12,000
Direct labour 10,000
Other manufacturing costs 10,000
Average selling price 50,000
Selling and administration expenses on these machines were established at £10,000 per unit.
Oxford Machinery had more than 4000 machines in use by the chemical industry and 5000 in use by the food
industry. Replacement part sales amounted to 20% of total business and carried a 100% mark-up on
manufacturing cost.
After the meeting, Mike Craven had a telephone call from the Chairman directing him to do everything
possible to prevent Toho from reducing Oxford Machinery’s share of the market for filling and sealing
machines in the chemical industry. But Mike knew that he had to operate in the real world and that, if he
simply pursued market share at the expense of everything else, the Chairman would be on the phone next
month asking why Oxford’s monthly accounting reports showed massive negative variances!
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9. CONCLUSIONS
It is hoped that this brief document will be useful to Business students It is not intended to state categorically
how to use case studies; but it does attempt to provide a framework that you might wish to use either as
individuals or in groups. Your tutor may want to take a very different approach to case study analysis and
that can always be justified by the fact that he/she has particular objectives to achieve.
10. REFERENCES
Easton, G., Learning from Case Studies, Prentice-Hall, 1982
Edge, A.G. & Coleman, D.R.,The Guide to Case Analysis and
Reporting, 3rd edition, Systems Logistics Inc, Honolulu, 1986.
John Heath, Onpen University, Milton Keynes England, 1993.
11. APPENDICES
OXFORD MACHINERY PLC, A worked example.
>Summary of Present Values
0 Watt Equivalent Incandescent
A
Philips 60 Watt Equivalent Twister CFL Philips 60 Watt Equivalent LED A Cree 60 Watt Equivalent LED Period Year Electricity Cost Cost of new bulbs years
Total Annual CF Discounted CF Period Year Electricity Cost years
Total Annual CF Discounted CF Period Year Electricity Cost Cost of years Total Annual CF Discounted CF Present Value over 24 year period $0 Present Value over 24 year period $0 Present Value over 24 year period $0 1 1 1 20 1 1 2013 1 1 2013 1 2 2 2014 2 2 2014 2 2 2014 2 3 3 20 3 3 2015 3 3 2015 3 4 4 2016 4 4 2016 4 4 2016 4 5 5 20 5 5 2017 5 5 2017 5 6 6 20 6 6 2018 6 6 2018 6 7 7 2019 7 7 2019 7 7 2019 7 8 8 2020 8 8 2020 8 8 2020 8 9 9 2021 9 9 2021 9 9 2021 9 10 10 2022 10 10 2022 10 10 2022 10 11 11 2023 11 11 2023 11 11 2023 11 12 12 2024 12 12 2024 12 12 2024 12 13 13 2025 13 13 2025 13 13 2025 13 14 14 2026 14 14 2026 14 14 2026 14 15 15 2027 15 15 2027 15 15 2027 15 16 16 2028 16 16 2028 16 16 2028 16 17 17 2029 17 17 2029 17 17 2029 17 18 18 2030 18 18 2030 18 18 2030 18 19 19 2031 19 19 2031 19 19 2031 19 20 20 2032 20 20 2032 20 20 2032 20 21 21 2033 21 21 2033 21 21 2033 21 22 22 2034 22 22 2034 22 22 2034 22 23 23 2035 23 23 2035 23 23 2035 23 24 24 2036 24 24 2036 24 24 2036 24 Philips 60 Watt Equivalent Incandescent Philips 60 Watt Equivalent Twister CFL Cree 60 Watt Equivalent LED &”Times New Roman,Normal”&12&A
&”Times New Roman,Normal”&12Page &P
2
Summary of Bulb Choices
Options:
Present Value:
Choice number
Philips
6
Philips 60 Watt Equivalent Twister CFL
Philips 60 Watt Equivalent LED
1
9
Cree 60 Watt Equivalent LED
PV Calculations
Finance Case Study
Philips 60 Watt Equivalent Incandescent
19
Period
Year
Electricity Cost
Cost of new bulbs
Replacement Cost
Total Annual CF
Discounted CF
Replacement Cost
Every
12
Cost of
new bulbs
Replacement Cost
Every 2
4
new bulbs Replacement Cost
Every
24
Present Value over 24 year period
$0
1
20
3
13
2
20
14
3
201
5
15
4
20
16
5
201
7
17
6
201
8
18
7
2019
8
2020
9
20
21
10
20
22
11
20
23
12
2024
13
2025
14
2026
15
2027
16
2028
17
2029
18
2030
19
2031
20
2032
21
2033
22
2034
23
2035
24
2036
Variables
Light Bulb Specifications
Philips 60 Watt Equivalent LED 19A
Cost Per Bulb
Rated Lifetime (hours)
Annual Hours
Initial Quantity of Bulbs needed
Wattage
Annual Cost of electricity
Bulb Replacement Labor Cost
Inflation
ROR
Energy Cost Calculation
Assumptions
Assumptions taken for solving this case