Reference no: EM13731491
You have just been promoted from front-line supervisor to be one of the firm's senior managers. During your business education, you learned that the primary role of a manager is to make good decisions. As a supervisor, you had frequently been making routine decisions, but you realize that decision making for the overall company can and will have far greater impact on the company and its employees.
Your boss, the chief executive officer (CEO), realizes that you do not have much practice in this higher level, decision-making process and has asked you to write a memo describing your understanding of how to make important decisions.
Your memo should address the following questions:
Describe at least 3 criteria that would determine whether the manager is making good decisions. What should be done to better assure that you are making a good decision?
In the realm of decision making, what are assumptions? Rather than use a dictionary definition, cite several specific assumptions that would go with any real-life decision you have made or have seen made at a company at which you have worked.
Given the importance of proper assumptions, your boss asked you to assess the accuracy of certain business assumptions and what could you do to test or confirm the credibility of them. The following were major assumptions for each firm:
An automobile manufacturer's assumption that the demand for SUVs would continue because gas prices would continue to rise
An airline's assumption that there was a need for an airline that provided no added amenities.
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What is the accumulated sum of the stream of payments
: What is the accumulated sum of the following stream of payments? $1,831 every year at the end of the year for 5 years at 7 percent, compounded annually.
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How much should he set aside today for the purchase
: Stephen plans to purchase a car 7 years from now. The car will cost $65,687 at that time. Assume that Stephen can earn 4.69 percent (compounded monthly) on his money. How much should he set aside today for the purchase?
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Explain how the information gleaned will support your career
: Explain your proposed approach for conducting the necessary research to develop quality deliverables, and explain how the information gleaned will support your career development in management
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Assume that all interest received at the end of the period
: You placed $8,173 in a saving account today that earns an annual interest rate of 10.41 percent, compounded semi-annually. How much will you have in this account at the end of 27 years? Assume that all interest received at the end of the period is re..
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In the realm of decision making what are assumptions
: In the realm of decision making, what are assumptions? Rather than use a dictionary definition, cite several specific assumptions that would go with any real-life decision you have made or have seen made at a company at which you have worked
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Margin account paid interest rate at the risk-free rate
: Suppose a futures margin account pays interest but at a rate that is less than the risk-free rate. Consider a trader who buys the asset and sells futures to form a risk-free hedge. Would the trader believes the futures price should be lower or higher..
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What does the face value of the bond have to be
: Hard Spun Industries (HSI) has a project that it expects will produce a cash flow of $1.8 million in 13 years. To finance the project, the company needs to borrow $1.0 million today. The project will also produce intermediate cash flows of $100,000 p..
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What is expected return–beta relationship in this economy
: Suppose that there are two independent economic factors, F1 and F2. The risk-free rate is 9%, and all stocks have independent firm-specific components with a standard deviation of 49%. What is the expected return–beta relationship in this economy?
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Pure discount government bond
: A pure discount (or zero-coupon) government bond is issued today that promises to pay $10,000 in 5 years. If the current interest rate on similar bonds is 6%, what is the price of the bond? Recall that the compounding interval for bonds is 6 months.
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