EIN 6357 Advanced Engineering Economic Analysis Spring 2017

Effective January 8, 2017

Official Course Syllabus and Class Schedule

Semester Period: 1/9/2017-5/2/2017 Class Session Cancellations: Live class

Live Class Location: ENG2 Rm 103
Class Hours: T&R: 4:30PM - 5:45PM
Instructor: Dr. Michael D. Proctor
Phone: (407) 823-5296; FAX: 3413
email: Michael.proctor@ucf.edu
Office: Room 318, Eng Bldg. 2
Office hours: T&R: 3:15 4:30 PM &
& 5:45-6:15 PM; Wed: 9-10:15 AM &
3:15 4:30 PM
& office hours will NOT be held on days
when the campus or the engineering
building is closed or the class suspended
or cancelled for any reason to include
scheduled cancellations in the syllabus,
holidays, weather alerts, football games,
etc.
Appointments: Please feel free to
request an appointment as necessary.

Catalog Description:
3(3,0). PR: EGN 3613; STA 3032 or equivalent. Topics include measuring economic
worth, economic optimization under constraints. Analysis of economic risk and
uncertainty, foundations of utility functions.

Course Description and Objectives:

The primary objective of the course is to build on EGN3613 economics and engineering
skills at the Masters level with advance topics applicable to future executives of
engineering-oriented, for-profit corporations. Engineering and computer science (ECS)
topics covered in the course include: (1) a rapid review of undergraduate Corporate
Financial Health, basics of finance, financial statements, and financial planning; (2) a
rapid review of undergraduate time and valuation of money; (3) a rapid review of
undergraduate capital investment and budgeting for engineering product and process
applications (e.g. Payback, IRR, NPV, Bid Price); (4) macroeconomic and other risk and
return assessments and analysis; (5) cost of capital (e.g. CAPM, WACC); (6) financial
leverage and capital structure (FLCS) for risk mitigation or assumption; (7) international
economics; (8) behavioral economics; (9) analysis of real options for risk mitigation or
assumption, and (10 divestiture, restructuring, lease, merger and/or acquisition
(DRLM&A) decision-making for risk mitigation or assumption. As engineers and
computer sciences may become corporate executives such as Chairman of the Board,
Board Members, Chief Executive Officers (CEO), or Chief Operations Officer (COO),
this course utilizes a nationally recognized leading business finance text and couples that
text with nationally recognized supplemental reading to address the fore mentioned
topics. The course context spans the internationally competitive, macroeconomic
operating environment of ECS corporations. To provide a balance between research and
the "real-world", the course blends financial and economic theory with contemporary and
historical case studies of corporations focusing on businesses largely grounded in ECS
disciplines found in the UCF College of Engineering and Computer Science. Analysis is
largely limited to point estimates. The course identifies and discusses other techniques
that contribute to economic range, distribution, and likelihood estimation and decision
making but does not cover them in detail or test them. EIN6528, Simulation-based Life
Cycle Engineering, more fully develops modeling, simulation, and analysis of selected
financial and economic theories. This course does not focus on engineering economics
for government organizations nor non-profit enterprises. The course largely avoids
disciplines not found at UCF CECS such as mining and agricultural, which may be found
at the Colorado School of Mines, Texas A&M, Florida A&M, etcetera.

Official UCF Class Notes (found on MyUCF):

This class is delivered via video streaming over the WWW to include course exams.
Throughout the course and during exams students must own or have access to a laptop or
other computing device with Excel or equivalent installed, Wifi capabilities,
and broadband internet capabilities that they may use. Unless otherwise stated, all course
exams will be through McGraw-Hill Connect or Webcourses Canvas and be physically
conducted on campus in a classroom scheduled by the University and overseen by the
course instructor or COVE approved Test Manager for remote sites at the date and time
specified in the syllabus. The current text for this course is "Fundamentals of Corporate
Finance" by Ross Westerfield & Jordan, 11th edition (2016) with Connect published by
McGraw Hill. Students are expected to be current and capable of performing EXCEL
Time Value of Money and related NPV spreadsheet tasks taught in the pre-requisite
undergraduate courses of (EGN3613 or EIN3351) AND STA 3032 or equivalent.
McGraw Hill provides online tests for each chapter of the Ross textbook, which may be
used to provide feedback to the student on his/her preparedness for this course.
https://highered.mcgraw-hill.com/sites/0078034639/student_view0/chapter9/. Student's
should be able to perform at the 80% or better level on quizzes for Chapter 1-9. Students
not performing at that level should enroll and complete the appropriate undergraduate
pre-requisite prior to enrollment in this course.

EGN3613 requires the use of Excel. EIN6357 also requires the use of Excel but does not
teach it but rather refreshes the use of the tool. At UCF, Excel is taught at the 1000/2000
level or may be taken through continuing education. If one is NOT qualified with using
Excel, then one should strongly consider taking a course through continuing education in
order become proficient with the tool.

Textbook Essential Articles, and Essential tools:

Required Textbook: Fundamentals of Corporate Finance Eleventh Edition, by

Ross, Westerfield, and Jordan (2016) with Connect. We will cover the entire
11th Edition. Connect is also REQUIRED AND ESSENTIAL for this course.
All EXAMS to include the final exam are performed on Connect. The 11th
edition of the book and Connect are available through the bookstore though I have
posted a student testimonial in the Webcourses module section about an
alternative, less expensive approach to accessing the book and Connect. Over the
semester, I expect you to perform all assigned LearnSmart Chapter and Excel
assignments, and exams through McGraw Hill Connect.
 Essential Articles: In addition to the above text book, you are expected to obtain
these articles in electronic form through the library using OneSearch or elsewhere
online:
o (1) Fuchs, et al., (2000) Strategic Integration: Competing in the Age of
Capabilities, California Management Review, Vol. 42, Number 3, Spring.
o (2 & 3) Porter, Michael (1979), How competitive forces shape strategy,
Harvard Business Review, March - April. & (2008) January The Five
Competitive Forces that Shape Strategy.
o (4) Dan Lovallo & Oliver Sibony The case for behavioral strategy,
McKinsey Quarterly, March 2010
o (5) Luehrman, T. Investment Opportunities as Real Options, HBR, July-
August 98
o (6) Trigeorgis, L. Making Use of Real Options Simple, The
Engineering Economist, 50: 25-53.
o (7) Thomas W. Malone, et al. Do Some Business Models Perform Better
than Others? MIT Sloan Working Paper 4615-06, May 2006
o (8) Bernd W. Wirtz, Business Model Management: Design - Instruments
- Success Factors, 2011
Essential Tools: A computer, Excel (or equivalent), and reliable high-speed,
broadband, internet access by WiFi.

Supplementary Material:
Other articles as identified on class lecture notes.
Highly Recommended:
o Behavioral Economics by Edward Cartwright, Routledge: London & NY;
2011.
o Real Options Analysis: Tools and Techniques for Valuing Strategic
Investment and Decisions, 2nd Edition by Johnathan Mun, John Wiley
& Sons, 2006
o Hedging:
Britta Berghfer, Brian Lucey, Fuel hedging, operational hedging
and risk exposureEvidence from the global airline industry,
International Review of Financial Analysis 34 (2014) 124139
Erik Hofmann, (2011),"Natural hedging as a risk prophylaxis and
supplier financing instrument in automotive supply chains",
Supply Chain Management: An International Journal, Vol. 16 Iss 2
pp. 128 141.
Martin Christopher Carlos Mena Omera Khan Oznur Yurt, (2011),
"Approaches to managing global sourcing risk", Supply Chain
Management: An International Journal, Vol. 16 Iss 2 pp. 67 81
Additional Readings:
o Predictably Irrational, Revised and Expanded Edition: The Hidden
Forces That Shape Our Decisions by Dan Ariely, Harper Perennial; 1
Exp Rev edition (April 27, 2010)
o Strategic Investment: Real Options and Games by Han T. J. Smit and
Lenos Trigeorgis, Princeton University Press, 2004
 Further Recommended Materials will be identified in the lecture notes but of
particular note will be Harvard Business School Case Studies. Selective Case
Studies will be highlighted in the course so that students wishing to obtain them
may do so. I will cite many additional articles, case studies and books in my
presentations but this is NOT a reason for you to duplicate my personal library.
Please take advantage of our tremendous UCF library and access the online
electronic sources through OneSearch. For the minimalist, you are not required to
obtain these further recommend materials. For the additional articles, case
studies, or books that I cite, you will be responsible on exams for only those
portions of the material that I cite and post in my lecture notes. However, the
astute student may advantage him or herself by investigating them for their
semester essay. Additional Journal Articles by case authors may be obtained
through the to the UCF Library homepage http://library.ucf.edu/.

General Information:
This syllabus may change due to unforeseen events, change in University policies
or due to correction of error. If conflict exists with any statement contained
within this syllabus and University policy, University policy governs. The
official class syllabus will be maintained on the UCF Webcourses web site.
Information contained in this syllabus may be supplemented by or may have been
formally disseminated in classroom in prior or subsequent lectures or
presentations.
Office hours are projected and not guaranteed. Change will be announced
through Webcourses or otherwise be posted by my office door.
Appointments may be made outside of normal office hours on an as available
basis.
Selected highlights from the policy section of the graduate catalog:
o Drop/Add: The University provides you the opportunity to interact with the
instructor and the material in a course at no cost to you during the first few
days of a semester. You may use this opportunity to determine if a course is
suited to your needs or if you are prepared to take the course. If you find that
you are NOT prepared for the course, you should not enroll or drop before the
drop/add deadline. If you have systemic, ongoing business or family situation
that conflicts with or prevents you from keeping pace with the course during
this semester, taking the exams when scheduled during this semester, or
performing at the level expected of a graduate during this semester, then as
appropriate do not enroll or drop the course for this semester. You may re-
schedule for a later semester when conflicts are removed and one is prepared
to undertake the material. If you find that you are NOT prepared for the
course or a business or family situation arises that conflicts or prevents you
from keeping pace with the course AFTER the drop/add period, then you may
apply for a withdrawal or under special conditions apply for an incomplete as
discussed below.
o Withdrawal: Withdrawal for each term begins after "Late Registration and
Add/Drop" ends. Students may withdraw from a class and receive the notation
of "W" until the date noted in the "Academic Calendar" of the Schedule Web
 Guide. A student may withdraw from courses using myUCF at
https://my.ucf.edu, or by visiting the Registrar's Office (Millican Hall 161),
certain college advising offices, or a Regional Campus records office.
Students may withdraw by fax at 407-823-5652. Faxed requests must be
received by 5:00 p.m. on the last day to withdraw and must include the
student's identification number, the course(s) to be dropped, and the student's
signature. Students also may send a written request to the Registrar's Office by
mail (to P.O. Box 160114, Orlando, FL 32816-0114). This letter must be
time-stamped or postmarked before the published withdrawal deadline and
must include the student's identification number, the course(s) to be dropped,
and the student's signature. Students seeking to withdraw in person must sign
the request and must provide photo identification. The official date of
withdrawal is the date the university receives the withdrawal request.
Requests received by mail are processed using the postmark as the official
date of withdrawal. A student is not automatically withdrawn from a class for
not attending, nor can an instructor withdraw a student from a class. Upon
request the instructor will provide the student with a PASSING or FAILING
assessment of the student's performance in the course prior to the last day of
withdrawal. No withdrawal is permitted after the deadline except in
extraordinary circumstances such as serious medical problems, military
deployment, or other events beyond the students control. Unsatisfactory
academic performance is not an acceptable reason for withdrawal after the
deadline. Students seeking to petition for a late withdrawal should consult the
College of Graduate Studies (MH 230). At the time of the request, the College
of Graduate Studies will ascertain from the instructor whether the student was
passing or failing the course. If the student was passing, a "WP" will be
recorded on the student's permanent record; if failing, a "WF" will be entered.
Medical and late withdrawals normally are for all courses taken in the
semester.
As a note on the University policy on withdrawals, late withdrawals have
a greater likelihood of denial.
o Incomplete: A grade of "I" (incomplete) is assigned by the instructor when a
student is unable to complete a course due to extenuating circumstances, and
when all requirements can clearly be completed in a short period of time
following the close of regular classes. In all circumstances where an "I" grade
is received, the student and faculty member must complete an agreement form
that specifies how and when the incomplete grade will be made up. This
agreement form is submitted with the instructor grade rolls at the end of the
semester, and a copy of this agreement is given to the Graduate College for
further follow-up. For those students on financial assistance such as loans, the
incomplete (I) must be made up by the agreement date. Failure to complete
course requirements by that date may, at the discretion of the instructor, result
in the assignment of an "F" grade, or a "U" grade for thesis, dissertation, or
research report hours. It is the student's responsibility to arrange with the
instructor for the changing of the "I" grade. Grades of "I" must be resolved
within one calendar year or prior to graduation, whichever comes first.
 Incompletes in regular course work left unresolved will be changed to "F" if
not changed in the allowed time period, and this time period may be sooner
for those receiving financial assistance.
As a note on University policy, the CECS Associate Dean or his
representative approves or disapproves incompletes as well as the type
frame proposed. See my comments on incomplete for this course as
described further below.

Academic expectations, Instructional Approach and Student Success:

It is my earnest desire that you have a worthwhile and fulfilling experience in
this course and that you be able to successfully perform to national standards
on problems drawn from the above cited engineering economics topics.
Performing at national standards may be a challenge. We are partners in your
learning and I will work hard on my end to accomplish those goals.
Depending on your technical background and currency of knowledge and skill
set, this course will be either relatively straight forward or a significant
challenge. If a significant challenge because you lack undergraduate
engineering economics and/or Excel skills, then I recommend that you drop
the course and re-schedule when prepared or mentally prepare yourself for a
very significant challenge. If you do not have the undergraduate knowledge
and skill set expected for the course but take the course anyway, you may find
that you need to heavily use McGraw Hill Connect LearnSmart online
learning system to learn the basic economic problems. Further self-study in
Excel will be required to set up the problems. If you had these courses in the
distant past, this course will require a rapid and rigorous refresh that may
challenge your abilities or demand more time than you had planned or have
available during a limited period of time available during the semester.
To avoid failure, your first requirement is to assess your qualifications for the
course. This course uses a nationally leading text authored by Ross et al from
MIT as presented by McGraw Hill. Chapters 1 through chapter eleven of the
Ross et al text contain problems found in texts used in the undergraduate pre-
requisite EGN 3613 course. Further, in industry, these problems are
commonly performed using Excel. The focus of this course is NOT of
undergraduate material but on the advanced material, which utilizes the basic
material in light of international corporate decision making, behavioral
economics, and risk mitigation or assumption. You will be tested on the basic
material to insure your competency.
Assuming that you have the pre-requisites then the next requirement is to keep
pace with the delivery of material during the course. If you fall behind, do not
think that you can suddenly catch up at the end. On the other hand, if you are
very successful on the early exams, do not think that you can breeze through
the later material. In past semester I have had students who fell behind and
thought they could catch up at the end but didnt or had a great start and then
failed to keep pace with the new material. Please do not let either situation
occur in your life. Please understand that I simply add up the score that you
earn and report the results whether the result is an A or F or something in
 between. There are no extra credit assignments to help you get a grade that
you desire. You must simply earn the grade you desire through the grading
system discussed below.
I believe that it is an educational disservice to you if I do not finish the entire
book and enhance the book with current case studies. Since lectures are
recorded for later and available for repeated viewing by students who are
mostly online and cannot ask questions in real time, I emphasize lecture as the
way I can deliver the greatest amount of information to you in the shortest
time with uniform dissemination. Lectures will occur during the regularly
scheduled class period unless stated otherwise through the class Canvas web
site or through University, College, or Department media outlets. All
classroom lectures notes will be available through the course Canvas web site.
Additional videos and other course materials will be posted at the Canvas web
site. You may find multiple viewing reveal new insights and enhance your
understanding of the material. However, the pyramid of learning underscores
that YOU are the most important variable in YOUR learning with PRACTICE
as one of the most important activities you can do to advance your learning
and performance. Connect provides you an excellent platform to practice
economic problems. Study after study has shown practice is what
differentiates pros. As an example of pro conduct, golfers have been known
to practice their swing for hours each day. Pro football receivers practice
receiving a pass. The New York Giants Odell Beckham Jr. made one of the
greatest NFL catches of all time, but pregame footage shows that the catch
was due to practice (http://ftw.usatoday.com/2014/11/odell-beckham-jr-
practice). Likewise basketball players, baseball players, etc all practice to
maintain their expertise and accomplish no look passes in basketball or high
batting averages in baseball. As for essays, successful writers are known to
have investigated and studied problems in depth and written and re-written
essays and various works of language to communicate their thoughts. If you
think that I cannot assess the difference between essays whose subjects have
been thoroughly studied and whose composition written and re-written to
achieve the highest quality and those that have not, then I believe that you are
mistaken. Unless you practice on the economic problems given or thoroughly
research and write your essay, you will not be able to perform at the National
level on the McGraw-Hill exams as the exams are time limited or write to the
level that is competitive with your classmates.

LearnSmart Chapter & Excel Assignments, Exams, Essay and Course Grade:
For financial purposes, UCF requires that I administer a Required Academic
Activity to all students, which will be an exam found in Webcourses. Content
examined by the Required Academic Activity will be this syllabus. Students
should complete this Required Academic Activity by the time and date stated
in Webcourses. Later completions will be accepted but will result in later
financial aid disbursements. Scores obtained on the Required Academic
Activity will be added to scores obtained on assignments, exams and essays
discussed below.
 Assignments, exams and essays are among the best known mechanisms to
insure student engagement. Understanding and mastery of course topics listed
in the syllabus below will be examined through McGraw Hill Connect
LearnSmart Chapter and Excel online assignments and exams and an essay
submitted through Webcourses. Connect, Webcourses, this syllabus or
classroom discussion may refer to term exam or quiz without
differentiation. In this course, the terms exam and quiz are synonymous
and refer to a for-grade examination unless the term practice precedes or is
implied before the term quiz or exam.
The course grade is composed of three parts totaling 1000 points in the
Webcourses Gradebook.
o One part of the overall course 1000 points is composed of LearnSmart
Chapter and Excel assignments found at the McGraw Hill Connect
class web site. Assignment scores at McGraw-Hill are raw and total
more than 300 raw points but will be converted by Dr. Proctor to 300
course points scale in the Webcourses grade book. Maximum raw
score for each assignment may be found with the assignment.
Assignments must be completed by the deadline set forth with the
assignment. Missed assignments are scored as a zero. MAKEUP
ASSIGNMENTS AND INCOMPLETES ARE NOT given for missed
LearnSmart Chapter and Excel assignments. Rather the FIVE lowest
percentage Chapter and Excel assignments scores are dropped before
converting raw scores to course points. LearnSmart Chapter and Excel
assignments test your ability to respond to questions without in-class
pressures. These assignments allow you to go at your own pace,
provide feedback, and in some cases retake the assignment over again
for a better score. This helps students who do well as home but not in
class.
o The course grade is also composed of two required, in-class Exams
that are overseen by a test manager and done under time pressure. The
exams are found at the McGraw Hill Connect class web site and are
each worth 200 points. Details on each examination are posted in the
syllabus below and on the online exam system. If you cannot take a
required exam during the regularly scheduled exam period due to some
emergency (e.g hospitalization, car accident, etc), notify me 72 hours
prior to the exam date or as soon as possible after the fact in case of an
emergency. The Optional Final Exam is the makeup exam. Exams are
a test of your ability to transfer your learning to other applications
while under a time constraint.
o The course grade is also composed of one essay worth 300 points
selected from the options listed and discussed further below and on
Webcourses. At least 72 hours prior or as soon as possible after the
fact in the case of an emergency, you may request an INCOMPLETE
for the course based on missing the essay if something unexpected
emerges (e.g. hospitalization, unexpected divorce). Essays are a test of
 your ability to articulate in writing your understanding of an assigned
topic within Advanced Engineering Economics.
Exam administrative details:
o Exams may contain algorithmic questions or questions drawn from
question sets or question pools. Acceptable computed answers will
require the computational ability to carry forward calculations
correctly to within an acceptable range of error. Algorithmic questions
are generated in real time by the exam system for each individual at
the time of the exam. Question sets are sets of questions that are
randomly chosen by the exam system to present to a student. Random
selection results in each student having a probability of receiving the
same question as someone else based on the number of questions in
the question set. Questions in a question set are not perfectly
equivalent in difficulty. I rely on law of large numbers that indicates
that given enough questions each student will experience an equal
proportion of question difficulty.
o To limit the opportunity for cheating, each exam will be conducted
during the class period. All exams will be overseen in the classroom
or at a remote section testing site. Remote testing sites include Cocoa
and MetroWest. These centers require advanced notice of all test
dates. Students must register in advance to take a test. Students will
make arrangement with the Test Manager at their site and report to the
designated classroom or facility on the date and time of the exam
sufficiently prior to the exam start time to check in with the exam Test
Manager. Exams begin and end with the class scheduled hours.
Selected highlights from the UCF Distance Learning program with
respect to exams follow:
1. Arrive 15-minutes prior to your scheduled appointment time.
Examinees arriving more than 15-minutes late may not be
admitted and will forfeit any costs paid.
2. You are required to bring two forms of identification. Your IDs
cannot be expired and must be in the name in which you are
registered to test.
3. Primary ID: Must be a government-issued, non-expired photo
ID. Acceptable documents include a driver license, passport,
state-issued identification card, or military identification.
4. Secondary ID: Must have a photo OR signature, such as a
Social Security Card, student ID, employee ID, or a debit/credit
card in the examinee's name.
o Each student is responsible for providing or arranging for computing
resources and high speed internet. Reliability of student chosen
computing resources and communication link between a given student
and the exam system and exam is the sole responsibility of the student.
Students are encouraged to identify and validate reliable computing
resources and communications link well prior to all exams
 o Appeal of the grading of an individual question on regularly scheduled
exams must be based on some cited McGraw Hill or Dr. Proctor error
and must be submitted within 72 hours of return of the exam.
Challenges of wording of a particular question must demonstrate that
the wording in a particular question is inconsistent with wording in
LearnSmart Chapter or Excel assignments or questions listed in the
syllabus below.
Essay administrative details:
o The essay assignment questions will be administered through and due
as indicated in Webcourses Canvas. This syllabus and Webcourses
provides further detail on expectations for essay topic content.
o External sources must be cited and citations will comply with APA
style and be listed at the end of the essay in a References Cited list.
Each submitted essay will be reviewed through Turnitin.com for
originality. Essays scored by Turnitin.com with 50% or more content
found in outside sources will be scored as a zero without review.
Essays with 25% or more content taken from outside sources will be
reviewed and may also be scored as a zero at Dr. Proctors discretion.
o While groups are encouraged to study the topics together prior to the
exam, the exam and essay responses must be the original work of the
student or students being examined.
o The essay assignment listed below and administered through the class
Webcourses website will be the responsibility of each individual or
self-selected team of two. Only one member will upload the essay
through Webcourses. The other member will upload an
acknowledgement that they are a team member. Any essay submitted
with three names on it, the last individual listed in the team will
receive a grade of zero. Each written response provides a writing
sample whose style can be used to validate the author as the author.
o Value of content in the essay will be scored against a rubric provided
below. If a student feels the essay was not fairly graded and requests
within 48 hours that I re-grade an essay, the re-grade request will be
honored only if it is understood and accepted by the student that the
new grade will stand, whether higher, lower, or the same as the
original grade.
Initial Course Scores:
o After submission of all required assignments, initial course scores are
based on the sum of scores from the required academic activity, scores
converted from LearnSmart Chapter and Excel assignment raw scores,
scores from regularly scheduled online exams, and score from the
essay assignment. I reserve the right to curve initial course scores
based on class performance. If curved, the curve will be based on
class performance relative to the overall current or prior student initial
course scores. Emphasis will be put on how top students perform as
well as the location of the class median, mode, and lastly average. If a
curve is given, then the curve will be a flat score increment and may
 move the class median to between approximately 80 to 85% of the
1000 point course score. Some students may exceed 1000 points.
Therefore if a curve decides a students course outcome, then the
students performance will ultimately be relative to the performance of
fellow UCF students in the class and/or past classes.
Optional Final Exam:
o I believe in second chances where appropriate. As such I offer all
students an online optional final exam (Optional FE) through McGraw
Hill Connect, the results of which may be used to replace the lowest
results of one of the two regularly scheduled exams or makeup one of
the exams. Specifically an individuals score on the Optional FE may
replace the lowest score on the previous regularly scheduled exams if
that score is lower than the score obtained on the Optional FE. The
Optional FE is comprehensive in that it tests economic calculation
across the course but due to the limited time, the Optional FE does not
contain the depth to be a substitute for all prior exams. Further, since
the Optional FE draws from the same Connect questions previously
examined, one should perform better on the Optional FE than one did
on the original exams. The Optional FE will not be curved. Appeal of
the grading of an individual question on the Optional FE must be on
the based on some cited McGraw Hill or Dr. Proctor error and must be
submitted within 24 hours of return of the exam.
Final Grades:
o Course points earned by a given student are converted from a score to
letter grade using the Score to Letter Grade Conversion Table (below)
to determine the students letter grade. There are no extra credit
assignments. Due to curves, points earned above assigned exam and
essay scores or substitute tests, most past end-of-semester class
medians are around 88% with between 55% and 65% of the student
obtaining a B+ or better. This is of course depends on the class and
the individual students and is therefore not a guarantee of either
individual student or class performance.
Further details on INCOMPLTE:
o If a student requests and I agree to assign an incomplete at the end of
the semester an incomplete will be posted to your transcript. A request
for an incomplete will be denied if a student attempts all required
exams and essays. I do NOT give an Incomplete after-the-fact as a
substitute for a failure or poor performance. If given an incomplete,
missed assignments must be completed by an agreed upon date.
All assignments submitted for grade will be the sole creation of the author.
Cheating, plagiarism, copying or representation of the work of others as your
own will result in actions in accordance with University policy and/or the
UCF Golden Rule (http://goldenrule.sdes.ucf.edu/). The possibility exists that
some students may attempt and/or find ways to cheat on exams rather than
individually understand and properly apply the techniques necessary to find
the correct solutions to given questions expected of a Masters student. In the
 long run cheating hurts the individual cheater in that the material is not
mastered. Beyond failure to master the material, the cheater and anyone
helping a cheater may be further adversely impacted as a consequence of
cheating. For those who cheat or help cheaters, often after the fact, not only
are cheaters reported but also those who help them cheat. Further,
academically outstanding students who assist cheaters may expect to be
forever hostage to the cheater that he or she assisted as revelation of cheating
or assisting in cheating can severely damage ones career or career
opportunities that are available to academically outstanding students.

Score to Letter Grade Conversion B-: 750 to 799 points

Table: C+: 700 to 749 points
A: 950 to 1000 points or above C: 650 to 699 points
A-: 900 to 949 points C-: 600 to 649 points
B+: 850 to 899 points F: 599 and below
B: 800 to 849 points
TENTATIVE SCHEDULE*
EIN6357 Topic Assignment
Class dates

Jan 10 Introduction to Overall Course. Textbook, Obtain Ross, et al:

syllabus, schedule, Canvas, and Connect. and additional
references cited
above.
Jan 12 Refresh: Overview to Corporate Financial Study Ross, et al:
Health, Financial Statements, taxes, and Chapters 1, 2 and
Cash flow pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Jan 17 Refresh: Working with Financial Statements Study Ross, et al:
and Long-Term Financial Planning Growth Chapters 3, 4 and
pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
 McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises..
Jan 19 No live class. Release Time for Take Home Perform for Grade
LearnSmart & Excel Tutorials LearnSmart Chapter
1-4 & Excel 2-4
assignments due per
McGraw-Hill
Connect.
Jan 24 Refresh: Valuation of Future Cash Flows. Study Ross, et al:
Time and Valuation of Future Cash Flows & Chapters 5, 6 and
Discounted Cash Flow Basics. pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises..
Jan 26 Refresh: Valuation of Future Cash Flows. Study Ross, et al:
Time and Valuation of Future Cash Flows & Chapters 7, 8 and
Discounted Cash Flow Basics. pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Jan 31 No live class. Release Time for Take Home Perform for Grade
LearnSmart & Excel Tutorials LearnSmart Chapter
5-8 & Excel 5-8
assignments due per
 McGraw-Hill
Connect.

Feb 2 Refresh: NPV for a project. Study Ross, et al:

Chapters 9 and
pertinent additional
references cited in
the course lectures.
Perform chapter
related McGraw
Hill LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Feb 7 Refresh: Capital Budgeting, Project Analysis Study Ross, et al:
& Evaluation Chapters 10, 11 and
pertinent additional
references cited in
the course lectures.
Perform chapter
related McGraw
Hill LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Feb 9 No live class. Release Time for Take Home Perform for grade
LearnSmart & Excel Tutorials LearnSmart Chapter
9-11 & Excel 9--11
assignments due per
McGraw-Hill
Connect.
Feb 14 In class proctored Exam. All Material 200 point Exam
prior: One ten point question drawn from will take place in
end of chapter question pools for chapters 2, the assigned
3, 7, 8; Two ten point questions drawn from FEEDS section
chapters 5 & 6; Seven twenty point questions classroom or
drawn from chapter 5& 6 (2), 9(1), 10 (4); facility and
Question pools are: proctored by the
Chapter 2: 1 & 2 assigned
Chapter 3: 1, 2, 3, 4, 5, 6, 7, 12, 21, 22 proctor. Perform
 Chapter 5: 6, 8, 9, 11, 12, 14, 15, 17, 20 Connect Online
Chapter 6: 10, 11, 15, 18, 21, 24, 25, 26, 27, Exam Ch 1 - 11
28, 40, 54 Raw Score
Chapter 7: 5, 6, 7, 8, 9, 10, 11, 12 containing McGraw
Chapter 8: 2, 3, 4, 5 Hill questions AND
Chapter 9: 7, 8, 10, 11 other lecture-based
Chapter 10: 10, 13, 14, 16, 17, 19, 20, 21, 24, questions. Exam
25, 29, 30, 36 starts at the
You will not successfully pass this test unless beginning of the
you know and can implement the functions regular class period
and setup spreadsheets in Excel prior to the and ends at end of
exam. You will NOT be able to satisfactorily regular class period.
pass the exam if you attempt calculation of
these problems by hand
Feb 16 Macroeconomics, Risk and Return Study Ross, et al:
Chapters 12, 13 and
pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Feb 21 Cost of Capital Raising Capital; Venture Study Ross, et al:
Capital; Chapters 14, 15,
and pertinent
additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart &
Excel assignments
as well as Student
Resources Excel
Master chapter
related exercises.
Feb 23 No live class. Release Time for Take Home Perform for grade
LearnSmart & Excel Tutorials LearnSmart Chapter
12-15 & related
 Excel 12-14
assignments due per
McGraw-Hill
Connect.
Feb 28 Financial Leverage and Capital Structure Study Ross, et al:
Policy; Dividends and Payout Policy Chapters 16; 17.
and pertinent
additional
references cited in
the course lectures.
Perform chapter
related McGraw
Hill LearnSmart &
Student Resources
Excel Master
chapter 16 related
exercises.
Mar 2 International Corporate Finance & Study Ross et al
Behavioral Finance and Behavioral Chapter 21, 22 and
Economics Dan Lovallo &
Oliver Sibony The
case for behavioral
strategy. Perform
chapter related
McGraw Hill
LearnSmart &
Student Resources
Excel Master
chapter 21 related
exercises.
Mar 7 Strategic Integration and Competitiveness; Study Ross, et al
Enterprise Risk Management Chapter 23 &
perform chapter
related McGraw
Hill LearnSmart
exercise. Also read
(1) Fuchs, et al.,
(2000) Strategic
Integration:
Competing in the
Age of
Capabilities,
California
Management
Review, Vol. 42,
Number 3, Spring.
 (2 & 3) Porter,
Michael (1979),
How competitive
forces shape
strategy, Harvard
Business Review,
March - April. &
(2008) January
The Five
Competitive Forces
that Shape
Strategy., (4)
Thomas W. Malone,
et al. The Sixteen
Business Models
MIT Sloan Working
Paper 4615-06, May
2006.
Mar 9 No live class. Release Time for Take Home Perform for grade
LearnSmart & Excel Tutorials LearnSmart Chapter
16, 17, 21, 22 & 23
assignments due per
McGraw-Hill
Connect.
Mar 14 & No Class Spring Break
16

Mar 21 Options, Investments in Real Options Study Ross et al

Chapters 24, 25.
Perform chapter
related McGraw
Hill LearnSmart
assignments &
Student Resources
Excel Master
chapter 25 related
exercises.
Luehrman, T.
Investment as Real
Options, HBR,
98; Trigeorgis, L.
Making Use of
Real Options
Simple, The
Engineering
 Economist, 50: 25-
53: Johnathan Mun,
2006;.
Mar 23 Investments in Real Options continued. Luehrman, T.
Introduction to Mergers and Acquisitions. Investment as Real
Options, HBR,
98; Trigeorgis, L.
Making Use of
Real Options
Simple, The
Engineering
Economist, 50: 25-
53: Johnathan Mun,
2006;. Study
Chapter 26
Mar 28 Mergers and Acquisitions; Leasing; Study Ross et al
Divestitures, Restructures, Mergers, Chapter 26, 27 and
Acquisitions, Leases in light of Real Options pertinent additional
references cited in
the course lectures.
Perform if ready
chapter related
McGraw Hill
LearnSmart
assignments.
Mar 30 Makeup Complete any
previous lecture
topic.
Apr 4 No live class. Release Time for Take Home Perform for grade
LearnSmart & Excel Tutorials LearnSmart Chapter
24-27 assignments
due per McGraw-
Hill Connect.
Apr 6 Exam: All Material prior. Minimum essential 200 point Exam
problems: Two ten point questions drawn will take place in
from end of chapter question pool for the assigned
chapters 13 and one ten point question from FEEDS section
14, 21, 25. One twenty point question drawn classroom or
from each chapters 14, 21, 25.; One thirty facility and
point question each from chapter 10, Venture proctored by the
Capital Stock calculation & Luehrman assigned
Phased Real Option. proctor.
Question pools are: Perform Connect
Chapter 10: 18, 22, 35 Exam Ch 10-17 21-
Chapter 13: 2, 3, 5, 6, 8, 11, 12, 13, 14, 15, 16 27 Raw Score
Chapter 14: 1, 2, 3, 5, 13, 15 containing McGraw
 In Class Venture Capital Hill questions.
Chapter 21: 8, 10, 11, 14, 15 Online Exam starts
Chapter 25: 3, 4, 5, 9, 10, 12 at the beginning of
Luehrman Phased Real Option the regular class
You will not successfully pass this test unless period and ends at
you know and can implement the functions end of regular class
and setup spreadsheets in Excel prior to the period.
exam. You will NOT be able to satisfactorily
pass the exam if you attempt calculation of
these problems by hand
Apr 11 No live class. Release Time for Essay Perform Essay
Research research
Apr 13 No live class. Release Time for Essay Perform Essay
Research research
Apr 18 Essay Due: As stated above and/or in No Live Class:
Webcourses, each student will submit an Turn in
essay on a topic from the options listed Homework-based
below. Essay questions
per instructions at
Webcourses and
written in
accordance with
the rubric below.
Apr 20 All above. Study day. No
class unless
otherwise stated.
Apr 25 All above. Study day. No
class unless
otherwise stated.
April 27 Optional Online Final Exam as discussed Optional Final
2017 above. Exam for 200
4:00 PM points to replace
6:50 PM lowest previous
exam will take
place in the
assigned FEEDS
section classroom
or facility and
proctored by the
assigned
proctor.
Online Exam
starts at the
beginning of the
class period and
 ends at end of class
period. All exam
topics identified
above. Exam
contains McGraw
Hill questions
drawn from Exam
1 & 2.

*Adjustments to the above schedule are possible as the course proceeds.

Essay Assignment Options (Select One):

Behavioral Economics Essay: Other than Anne Mulcahy, CEO of Xerox, compare
and contrast cause and effect on Investment Outcomes in two competing ECS
Corporations of Behavioral Strategy in the decision making process in terms of
cognitive biases and counter-balancing practices: (300 points total)

The intent of this assignment is to have some behavioral economics fun while learning
about the impacts of behavioral strategy - cognitive bias and related counter-balancing
practices on corporate economic decision making processes. The assignment approach
is study of contrasting ECS corporate cases: success and less successful/failure. In
accordance with the syllabus, each individual student or self-selected pair of students will
in Microsoft Word 2013 or earlier formats write and upload an essay through the
Webcourses Canvas website assignment link. Only ONE submission for a pair of
students. Write your essay separated into five sections with each section marked with a
label from text highlighted in bold below.

Assignment & Draft Rubric:

a. Behavioral Economics and Behavioral Strategy Basics: (1) Discuss economic
factors highlighted by Lovallo & Sibony that motivate corporations to be
concerned about improving the economic decision making process. (2) As
appropriate to your focus and presentation, define behavioral finance, behavioral
economics, cognitive biases, counter-balancing practices, or behavioral strategies
in the decision making process using Ross et al, Edward Cartwright, or Dan
Lovallo & Oliver Sibony (L&S) terminology. Correctly use L&S terminology
throughout the rest of the essay. (3) Besides the two corporations and
Boards/CEOs who are the subject of your assignment, highlight literature
indicating use of behavioral strategies in decision making processes by CEO's or
Boards has made a difference in corporate economic outcomes. (4) Identify when
bias may be good for economic outcomes and counter balancing practices
counter-productive or inefficient. (60 pts)
b. Behavioral Strategy within the decision-making process of a Successful ECS
Corporation: L&S state, Adopting behavioral strategy means not only
embracing the broad principles set forth above but also selecting and tailoring
specific debiasing practices to turn the principles into action. For a successful
 ECS corporation select a time period since 1995 and: (1) prior to tenure of the
successful CEO, identify and discuss evidence of L&S cognitive bias of the prior
CEO, Board, Corporate Culture and/or Union within the decision making process
within the corporation; (2) using Lovallo & Sibony terminology at the beginning
of the new CEO tenure, identify and discuss evidence of practices and/or, if
available, actual behavioral strategies newly established within the corporation or
within the CEOs personal decision-making process to counter-balance cognitive
bias; (3) link L&S cognitive bias or counter balancing strategies/processes/
practices to major capital budgeting investments and/or merger and acquisition
(M&A) case or a series of major cases within your selected corporations over a
period of time. Overall comment: This section is about L&S cognitive biases and
establishing successful L&S practices as part of a behavioral strategy to counter
balance the bias NOT about actual market, financial or economic outcomes.
Focus on linking observed biases or counter-balancing practices to specific
investments or pattern of investments. If possible state the basic amount and date
of each major M&A or investment. (60 pts)
c. Behavioral Strategy within the decision-making process of a Less Successful
ECS Corporation: L&S state, Adopting behavioral strategy means not only
embracing the broad principles set forth above but also selecting and tailoring
specific debiasing practices to turn the principles into action. For a less
successful competing corporation in the same industry during a concurrent or
mostly overlapping time period as the successful corporation (or for a sequential
period if examining two CEOs from the same corporation), (1) identify and
discuss evidence of ongoing L&S cognitive bias of CEO, Board, Corporate
Culture and/or Union within the decision making process within the corporation;
(2) using Lovallo & Sibony terminology identify and discuss evidence of failure
to counter-balance bias and/or, if available, actual failed practices or behavioral
strategies established by the corporation or CEO; (3) link L&S cognitive bias or
failed counter balancing strategies/processes/ practices to major capital budgeting
investments and/or merger and acquisition (M&A) case or a series of major cases
within your selected corporations over a period of time. Overall comment: This
section is about L&S cognitive biases and failure to establish or failed L&S
practices as part of a behavioral strategy to counter balance the bias NOT about
actual market, financial or economic outcomes. Focus on linking observed biases
or counter-balancing practices to specific investments or pattern of investments.
If possible state the basic amount and date of each major M&A or investment.
(60 pts)
d. Outcomes and Confounding Factors: For the time frame previously identified,
using 10-K or other validated strategic, economic, or competitive positioning
data, contrast the two corporations by (1) identifying levels of economic outcome
for the case or series of cases over the selected period of time using ROI, NPV
and/or other economic indicators including changes in Financial Health, Cost of
Capital, FLCS, and/or corporate Beta.; As I read this section, I will reflect on the
questions, are strategic impacts (e.g. bankruptcy/successful product launch/IPO;
first-to-market successful product launch), economic outcomes (e.g. realized
shareholder value gains/losses, financial ratio changes from five categories of
 financial health to include stock price, eps, dividends, etcetera), and competitive
position (e.g. maintenance, improvement or loss in industry position, market share
gain/losses) improved or deteriorated over the period being considered? Are the
conclusions about the impact of cognitive bias on decision making processes
being tied to outcome from those decisions supported by the quantified evidence?
(2) There are many other factors besides cognitive bias in the decision making
process that may confound your assessment and conclusions above. Pictorially
represent through a competitive landscape diagram factors beyond behavioral
strategy that confound or otherwise undermine the strength of the associations
between outcomes and behavioral strategy. Beyond competitive landscape
factors, additional factors may be corporate strategy, integration, integration,
financial resources, access to intellectual property, etc. This assignment is NOT a
controlled experiment but rather an ex post facto assessment of cases within
corporations governed by CEOs/Boards/Unions you select. (3) If possible
discuss legacies from the history or, if not possible present, parallel cases that
benefited from or were otherwise impacted in terms of their corporate competitive
and economic situation. (60 pts)
e. References Cited: List only references that you cite in your essay. Cite and list
using APA style at least two references other than the book and Dr. Proctors
lecture notes. Strength, Relevance, Uniqueness, Quality and Quantity of reference
is important for span and depth of coverage. Case uniqueness is valued more than
a repeat of a case everyone else is doing or has done before. Literature may
contain named expert or analysis assessments, news articles from reputable news
agencies, corporate 10Ks, annual reports, press releases, or other such documents.
Do NOT list sources in the reference list that are not cited in the body of the
essay. If using internet sites or references, then provide the complete internet site
link. If I am unable to bring the link up, then the site or reference will be
discarded. When considering cognitive bias, a key question that I will reflect on
while reading the essay is, what evidence (e.g. (in order of value) expert analysis,
expert opinion, speech acts (i.e. quotes of CEO and/or Board member in his/her
own words), assessments of major business or media outlets, associated actions,
media commentary, and your opinion) supports your assessment? Your
References Cited list is evidence of support. (60 pts)

Grading and Administrative Notes:

The Case histories for the above topics should contain past actual data. This assignment
is NOT about arguing what might have been if different decision practices where in
place. Rather, the essay should be descriptive in nature. As an example, for behavioral
economics the objective is presenting what, if any, counter balancing practices and
behavioral strategies were in place to address cognitive biases. Further, an effort will be
made to associate strategic, economic, and positioning outcomes with the presence or
absence, success or failure of the practice to achieve goals.

As an exception to the concurrent, competing industry requirement, behavioral economic

case histories may be drawn from different periods in the same corporations life cycle
where sequential CEO's exhibited vastly different behavioral traits resulting in vastly
different results. Do not fail to realize that sometimes immediate surface improvements
may be the result of a predecessor and a lag for those improvements to have an impact.

I am not interested in assertions. I recommend triangulation of data where possible. As I

read a given essay I will reflect on the question, what evidence (e.g. literature, speech
acts, expert opinion, analysis assessments, or media commentary) supports your claims?
I reward clarity. Organizing the essay in five marked sections makes for ease in grading
as well as in clarity of presentation.

You may work with others in discussion or in research teams to address the essays;
however, the essays that you turn in must be YOUR original creation as measured by
Turnitin.com originality score. Those scores are categorized by Turnitin.com as Green
(less than 25% outside sources), Yellow (25% to less than 50% outside sources), and Red
(50% or above outside sources). Essays receiving a Red categorization will receive a
score of zero. Essays receiving a Yellow categorization and lacking sufficient originality
in the body of the essay by my subjective judgment will receive a score of zero.

The submitted document to include heading, body, and in-body citations will contain no
more than two thousand five hundred words as counted by Microsoft Word, word-count
tool. You may enhance your information transfer by embedding captioned pictures,
figures, tables (e.g. a systematic arrangement of data usually in rows and columns for
ready reference), short quotes from noted sources, and your references cited list either
embedded so that it is not counted by Word or as images. Images are NOT counted as
words by the word-count tool. If you do choose to imbed the reference list, then place
web links with the in-body citation. Word count overage or violations of the embedding
instructions will result in appropriate point deductions.

OR

Risk Mitigation or Assumption Essay Assignment: Compare and Contrast cause

and effect of Risk Mitigation or Assumption Techniques Choose One topic:
a. Financing, Leverage & Capital Structure (FLCS);
b. Hedging, or
c. Real Options
in two competing ECS Corporation. Do not do Franklin Chemical (Luehrman) or
fuel hedging by Southwest Airline prior to 2008 or hedging by financial corporation
prior to the Great Recession: (300 points total)

The intent of this assignment is to have some risk mitigation fun while learning about the
impact of FLCS, Hedging or Real Options. The assignment approach is study of
contrasting ECS corporate cases: success and failure. In accordance with the syllabus,
each individual student or self-selected pair of students will in Microsoft Word 2013 or
earlier formats write and upload an essay through the Webcourses Canvas website
assignment link. Only ONE submission for a pair of students. Write your essay
separated into five sections marked with each section labeled with the text highlighted in
bold. Cite general literature associated with the risk mitigation/assumption technique you
have selected.

Assignment and Draft Rubric: Five parts:

Part a): Risk Mitigation or Assumption Basics:

Of the following three topics - Financial Leverage & Capital Structure (FLCS);
Hedging, or Real Options - pick one as the topic of the paper. Depending on your choice,
(1) define each critical theory or application within your chosen topic. FLCS
definitions should be based in Ross (e.g. M&M (Static Theory), Pecking
Order Theory, Observed Behavior Theory). Hedging definitions should be
based in Ross (e.g. reduce fluctuations in price or rate, cash flow, value
of firm) but if you find Ross definitions too restricted to financial hedging,
then you may draw from hedging definitions identified in any of three hedging
articles listed above or an alternative article approved by Dr. Proctor. Real
Options definitions should be based on Mun (Real Options Analysis pg 33),
Trigeorgis (Engineering Economist, 50 (2005): pg 27- 31) and/or Proctor
(Spiral, Spiral with spinoff). (30 pts)
(2) Discuss in general generic corporate motivation for risk mitigation or
assumption and how your chosen topic - FLCS, hedging or real options setup
and possible execution - may address that motivation. If FLCS or hedging is
selected, identify financial benefits, risks or opportunities to ECS business
models that various positions might mitigate or exploit or create. For
example, FLCS examples should highlight benefits, risks or opportunities of
each appropriate focus: (1) D/E ratio optimization; (2) internal financing, debt
as necessary, equity as last resort; (3) industry or life-cycle stage or CEO
observed behavior that does not fit static or pecking order theories. Observed
behavior is often the preferred method to obtain financial resources in the
technology industry as benefits from growth obtained through issuing stock
may overcome dilution concerns. FLCS examples may include artificialities
in FLCS due to macroeconomic policies by national or international fiscal (e.g
executive or legislative regulation, tax policy, etc.) or monetary (e.g. Federal
Reserve, central banks interest rate, bond buying, etc.) authorities. Hedging
attempts to reduce volatility (Ross, fluctuations) in price or rate of a
good or service. Ross pg 755 extends the notion of hedging beyond price of
commodities, labor, or rate of interest, exchange rate, etcetera to include
reducing volatility in cash flow and value of the firm. Diversification
should not be confused with hedging, which is the taking of offsetting risks.
With diversification, risks are uncorrelated. With hedging, they have negative
correlations (which may also be interpreted as filling a gap in capability)
http://riskglossary.com/link/hedging_and_diversification.htm. If real options
is selected, identify not only opportunities but competitor and/or technology
risks or to a ECS business models that at least the defer, staged,
abandon, and the inter-project compound option real option choices might
mitigate or exploit. One may expound (30 pts)
Part b): FLCS, Hedge or Real Option (select one) Cases: Select two cash-flow-
supported cases from competing, for-profit Engineering, Computers/Electronics/Optics,
or Computer Science (ECS) corporations in the same industry during a concurrent or
mostly ovelapping time period since 1995 that illustrate different approaches to the
selected topic. Real Option periods may extend into forward-looking projected future
states.
(1) Cite a distinct example of success by one firm.
**** Whether it be FLCS, hedging, or real options DO NOT do an airline
industry case on fuel hedging such as SWA hedging of fuel prior to 2008 as that
case is well known and is now well established in the airline industry.
**** Whether it be FLCS, hedging, or real options DO NOT do a study of
financial corporations (e.g. Bear Stearns, Goldman Sachs, etcetera) or individuals
(e.g. John Alfred Paulson, George Soros, Kyle Bass, etcetera) in the financial
industry performing financial options or speculative financial bets such as John
Alfred Paulson bets against the housing market or George Soros bets against the
pound or the yen.
Depending on your topic, real option cases must be clearly cash-flow-supported and may
be on pre-IPO, IPO, internal, divesture, restructure, lease, merger and/or acquisition
(DRLM&A) investments in service, process, and/or product assets. Correctly identify
and categorize the FLCS, hedge or real option in each corporation. For example, if the
topic is FLCS, do case characteristics characterize FLCS as M&M, Pecking Order, or
Observed Behavior? For hedging, is price, rate, cash flow, or firm value the primary
focus of hedging? For real options, is the tactic a staged, switch, strategic spin-off,
etcetera (be consistent in terminology with earlier Mun, Trigeorgis, or Proctor
definitions), As I read this section of each essay, I will reflect on the question, is the
FLCS, hedge, or real option correctly described and categorized for the first corporation
case? (30 pts)
(2) Cite a distinct example of failure or less success for the second corporation
case? Same remarks from (1) apply. (30pts)

Part c): FLCS, Hedge or Real Option (select one) Case Competitiveness, Integration
and Alignment Context:
(1) For the time period previously identified, students will contextually and
visually frame the competition between the chosen cases in light of the Porter
Competitiveness Landscape model; Fuchs, et al Strategic Integration Model;
and Malone et al Sixteen Business models by creating case specific figures for
each model (e.g. three figures contextually completed, not generically
presented). From this framework, students will indicate the contribution to
competitive advantage of the FLCS, hedge, or real option to the first
corporation if any in light of alternative explanations for performance
outcomes. As I read this section, I will reflect on the questions, are the cases
appropriately framed and reflect competitive advantage for the first
corporation case? (30 pts)
(2) Same as (1) but for the second corporation case? The model frameworks may
be shared as appropriate. (30 pts)
Part d): Outcomes and Confounding Factors:
(1) For the time frame previously identified, using abstracted 10-K or other
validated financial, market share, or competitive positioning data, students
will support the previous assessment of failure or success outcomes due to
FLCS, Hedge, or Real Option strategy as appropriate for the first case.
Supporting evidence will include specifics monetary value of the FLCS,
Hedge, or Real Option as appropriate. Supporting evidence should also
indicate the contribution to change in earnings per share over time using NPV
and/or other economic indicators, changes in Financial Health, Cost of
Capital, FLCS, and/or corporate Beta in relation to past performance and peer
performance. Additionally, students will identify and support inferences
concerning the validity of risk mitigation claims and/or FLCS theory
applicable to the corporations being examined. Comment on confounding
factors beyond risk mitigation such as competitive power, integration and
alignment concerns, financial resources, access to intellectual property,
behavioral economics, etc. that confound or otherwise undermine the
strength of the associations between outcomes and risk mitigation strategy. If
possible discuss legacies from the history or, if not possible present, parallel
cases that benefited from or were otherwise impacted in terms of their
corporate competitive and economic situation. As I read the essay, I will
reflect on the questions, are outcomes not just specific to the FLCS, Hedge, or
Option but also include such things as strategic (e.g. bankruptcy
avoidance/failure/successful product launch/IPO; first-to-market successful
product launch, market share gain/losses), economic (e.g. realized shareholder
value gains/losses, financial ratio changes from five categories of financial
health to include stock price, eps, dividends, etcetera), and competitive
position (e.g. maintenance, improvement or loss in industry position) changes
over the period considered in the essay? Are essay claims or conclusions of
success or failure supported by quantified outcome differences between the
cases? Are essay claims or conclusions about topic theory supported? Do the
case inferences support the applicability of a theory? What risks might
overwhelm the risk mitigation approach? (30 pts)
(2) Same as (1) but for the second corporation case. (30 pts)

Part e): References Cited: List only references that you cite in your essay. Cite and list
using APA style at least two references other than the book and Dr. Proctors lecture
notes. Strength, Relevance, Uniqueness, Quality and Quantity of reference is important
for span and depth of coverage. Case uniqueness is valued more than a repeat of a case
everyone else is doing or has done before. Literature may contain named expert or
analysis assessments, news articles from reputable news agencies, corporate 10Ks, annual
reports, press releases, or other such documents. Do NOT list sources in the reference list
that are not cited in the body of the essay. If using internet sites or references, then
provide the complete internet site link. If I am unable to bring the link up, then the site or
reference will be discarded. (60 pts)

Additional notes:
Grading and Administrative Notes:

The Case histories for the above topics should contain past actual data. This assignment
is NOT about arguing what might have been if different decision practices where in
place. Rather, the essay should be descriptive in nature. As an example, for risk
mitigation the objective is presenting what, if any, Financing, Leverage & Capital
Structure; Hedging, or Real Options initiatives were or were not taken to mitigate risk.
Further, an effort will be made to associate strategic, economic, and positioning outcomes
with the presence or absence, success or failure of the practice to achieve goals.

As an exception to the concurrent, competing industry requirement, case histories may be

drawn from different periods in the same corporations life cycle where sequential CEO's
exhibited vastly different risk mitigation steps resulting in vastly different results. Do not
fail to realize that sometimes immediate surface improvements may be the result of a
predecessor and the lag in time necessary for those improvements to have an impact.

I am not interested in assertions. I recommend triangulation of data where possible. As I

read a given essay I will reflect on the question, what evidence (e.g. literature, speech
acts, expert opinion, analysis assessments, or media commentary) supports your claims?
I reward clarity. Organizing the essay in five marked sections makes for ease in grading
as well as in clarity of presentation.

You may work with others in discussion or in research teams to address the essays;
however, the essays that you turn in must be YOUR original creation as measured by
Turnitin.com originality score. Those scores are categorized by Turnitin.com as Green
(less than 25% outside sources), Yellow (25% to less than 50% outside sources), and Red
(50% or above outside sources). Essays receiving a Red categorization will receive a
score of zero. Essays receiving a Yellow categorization and lacking sufficient originality
in the body of the essay by my subjective judgment will receive a score of zero.

The submitted document to include heading, body, and in-body citations will contain no
more than two thousand five hundred words as counted by Microsoft Word, word-count
tool. You may enhance your information transfer by embedding captioned pictures,
figures, tables (e.g. a systematic arrangement of data usually in rows and columns for
ready reference), short quotes from noted sources, and your references cited list either
embedded so that it is not counted by Word or as images. Images are NOT counted as
words by the word-count tool. If you do choose to imbed the reference list, then place
web links with the in-body citation. Word count overage or violations of the embedding
instructions will result in appropriate point deductions.