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Essay Instructions: Matthew, Jerry and Shen were partners in a nursery business at Bowral in NSW, called Bowral Nurseries. They had no written partnership agreement. They held regular meetings to discuss the business and ways in which it could be made more profitable. They had always concentrated on quality plants and garden accessories and had always vowed not to buy cheap plants or garden accessories. At one of the meetings they considered the possibility of adding a range of quality Italian ceramic pots to the plastic pots that they already sold in their nursery business. It was agreed that if any of the partners saw a suitable range of ceramic pots, they should purchase them; but they should not spend more than $10,000.
Some months later, during the visit of a salesman from a nursery wholesaler with whom they regularly did business, Matthew mentioned that the firm was interested in buying ceramic pots but had been unable to find a reliable supplier who had a good quality product. The salesman replied that his company could provide cheap Asian manufactured ceramic pots on a regular basis as they were the country’s biggest importers of this type of pots. Further if Matthew placed an order immediately, he would receive a commission of 10% on the purchase price. Matthew placed an order for $20,000 worth of pots with the salesman.
Jerry and Shen first found out about the order when the pots arrived. They claimed that they had not discussed the purchase of cheap ceramic pots and that Matthew had no authority to order them.
When Jerry and Shen subsequently discovered that Matthew had received a $2,000 commission on the purchase of the pots, they wanted to end the partnership.

Discuss.

Customer is requesting that (philipj) completes this order.

Essay Instructions: First:Access the cases from http://www.xanedu.com/?PackId=&SKey=&debug=&urlDest=&RE=&Promo=&TI=&App=&Key=&P=&ErrorPage=&HLVLID=&SMARTCHECK=&ErrStr=&ScreenName=&ID=0.930752

second: sign in username is Jam202 and password is jdcitn

third go to "selected course packet"

Complete the analysis of Arundel Mills(Case 4):
The analysis questions are as follows:
For class
1. Why do the principals of Arundel Partners think they can make money buying movie sequel rights? Why do the partners want to buy a portfolio of rights in advance rather than negotiating film-by-film to buy them?

2. Use DCF to estimate the per-film value of a portfolio of sequel rights such as Arundel proposes to buy.

3. What are the primary advantages and disadvantages of the approach you took to valuing the rights? What further assistance or data would you require to refine your estimates of the rights’ value?

4. What problems or disagreements would you expect Arundel and major studio to encounter in the course of a relationship like that described in the case? What contractual terms and provisions should Arundel insist on?

For Group 1 and Group 2

1. Why do the principals of Arundel Partners think they can make money buying movie sequel rights? Why do the partners want to buy a portfolio of rights in advance rather than negotiating film-by-film to buy them?

2. Estimate the per-film value of a portfolio of sequel rights such as Arundel proposes to buy. [There are several ways to approach this problem, all of which require some part of the dataset in Exhibits 6-9. You may find it helpful to consult the appendix, which explains how these figures are prepared.]

3. What are the primary advantages and disadvantages of the approach you took to valuing the rights? What further assistance or data would you require to refine your estimates of the rights’ value?

4. What problems or disagreements would you expect Arundel and major studio to encounter in the course of a relationship like that described in the case? What contractual terms and provisions should Arundel insist on?

for case 4 Arundel Mills: analysis should not be any more than four pages (not including appendices) and should contain answers to all questions for the analysis. The report (and presentation) should carry minimal amount of case facts

For case 1 Tree values: complete the following
Questions for discussion
1. Assume that the appropriate cost of capital is 240 basis points (2.4%) above the ten-year government bond rate. To calculate the cost of capital, should you add the 240 basis points to a ten-year Treasury Bond that yielded 6.0$% in June 2000 or a ten-year Treasury Inflation Protected Security (TIPS) that yielded 4.14% in June 2000? How do you decide?
2. When would you recommend cutting a 50 year old tree that is 10” DBH? Assume no grade changes and that a hypothetical tree takes five years to grow one inch in DBH. What if it takes ten years to grow one inch in DBH? If you would recommend different times to cut the tree, please explain why you reach different conclusions.
In the following questions, assume all the trees in Mr. Smith’s forest have to be cut at the same time.
3. If Mr. Smith simply let his trees grow, would they increase in value? When would you recommend cutting the trees if they are simply left to grow? Assume the trees grow at a rate of 1” of DBH over ten years.
4. If Mr. Smith decides to thin and manage his forest, how would this affect its value? Assume that half the trees are thinned and that the remaining trees grow at the rate of 2” in DBH every ten years. Also assume that a forester’s management costs are offset by the value of the thinned trees.

Questions for Group 1
1 Assume that the appropriate cost of capital is 240 basis points (2.4%) above the ten-year government bond rate. To calculate the cost of capital, should you add the 240 basis points to a ten-year Treasury Bond that yielded 6.0$% in June 2000 or a ten-year Treasury Inflation Protected Security (TIPS) that yielded 4.14% in June 2000? How do you decide?
2 When would you recommend cutting a 50 year old tree that is 10” DBH, grows at the rate of one inch of DBH each five years, and also increases one grade with each 2” growth in DBH? Is the decision the same if the tree is growing at the rate of 1” DBH over ten years?
In the following questions, assume all the trees in Mr. Smith’s forest have to be cut at the same time.
3. If Mr. Smith simply let his trees grow, would they increase in value? When would you recommend cutting the trees if they are simply left to grow? Assume the trees grow at a rate of 1” of DBH over ten years.
4. If Mr. Smith decides to thin and manage his forest, how would this affect its value? Assume that half the trees are thinned and that the remaining trees grow at the rate of 2” in DBH every ten years. Also assume that a forester’s management costs are offset by the value of the thinned trees.
5. What forest management strategy, if any, would you recommend to Mr. Smith?

-for case 1:prepare a report. This is not a group assignment (however you are free to discuss with your group). The report should provide alternative analysis – i.e. what you would have done differently from the groups presenting the case. The alternative report should not be more than 2 pages (not including appendices).

Essay Instructions: Suppose another home improvement Keima Construction located in CA would like to be the partner of Capitol Home Improvement, LLC. You are responsible for preparing a draft of the agreement. You may see a sample partnering agreement at
http://www.crn.com/it-channel/18809082
Please edit this agreement and customize it to fit the need of Keima Construction and Capitol Home Improvement, LLC.
Expectations:
1. Answer questions with clarity.
2. Show depth and breadth in your paper to enhance the quality of your paper.
3. Try your best to search in our library to find some papers/articles to support your argument and show them in the reference list.

Essay Instructions: Please do this writing in easy wording as I am a foreigner Student It need to sound that I wrote this.
I will also attache my text book copys too. I don't need any references. Just simple plan writing. It should be wrote from the point of undergrad student.


Session 4: Case Study

This assignment requires at least some background knowledge of the Enron case.

Imagine you are a young, up and coming MBA at Enron in the winter of 2000. You have been working for the company for two years and eleven months and have far exceeded company performance objectives. According to your contract, options for 100,000 shares of stock exercisable at $15 dollar a share, will vest after three years of continuous service, on the condition that you meet all performance objectives. The stock currently sells for $65 a share and is rapidly increasing in value.

You have been involved in managing several Enron accounts. In your work you have, on direct orders from the CFO, arranged several transactions with a number of partnerships that seem odd to you. These complicated financial transactions appear to transfer debt from Enron to these partnerships. Enron shows revenues from these partnerships, but you have knowledge of some of the operations of the partners and cannot see how these transactions are acceptable to standard accounting practices. You send a memo to the office of the CFO pointing out your concerns. A financial manager for the company calls you on the phone (something very unusual). He thanks you for your diligence, and says that everything is fine. Arthur Andersen, the external auditor, has reviewed and approved the creative transactions that, he says, are planned according to cutting edge financial strategies.

Then, a week after you receive the call from the office of the CFO, you are at a function for high-ranking Enron executives. You feel extremely privileged to have been invited. You are standing alone in the garden in a quiet area where there are few people and you overhear people talking. The CFO is speaking with some high-ranking person from Arthur Andersen. They speak about the practice of inflating Enron earnings and transferring debt to partners. You strain to make out the heated discussion that has something to do with the sustainability of the practice and the possible consequences of discovery. Someone says, "Its really too late. We either make it work or the jig is up, and we try to contain the damage. In either case we all know what we should do with our stock."

The conversation breaks up and no one notices you. No one knows that you overheard the conversation. You have already written a memo about what you do know. You have complete deniability. In fact, if a scandal breaks, you can even claim that you did speak up about what you knew and received assurances that everything was fine.

Write 800-1000 words (minimum) that discuss the following questions:

Will you "blow the whistle" on what you heard in the garden? If so, how will you blow the whistle? If you decide to blow the whistle, what are your reasons for doing so? If you choose not to blow the whistle, what are your reasons?

Your discussion should reflect knowledge of what Boatright says about issues, problems and justifications for whistle-blowing. Also, in discussing the answers to these questions you should include the following: 1) you should evaluate real and potential conflicts of interests that confront you in your decision 2) you should explain how your reasoning is consistent or inconsistent with the three following moral theories: Kantian moral theory, utilitarian moral theory and virtue theory. Again, be honest in explaining your decision and your reasoning. Evaluation will not concern what you decide, but the quality of your reasons and explanations, and your knowledge of the moral theories under consideration. Also, in discussing your reasons for blowing the whistle or not blowing the whistle, you should reveal some knowledge of issues and arguments on whistle-blowing presented by Boatright in the textbook.

Your personal opinions are not relevant to evaluation of this essay. The essay will be evaluated according to the quality of 1) reasoning 2) explanation of factual issues, concepts and principles relevant to the topics 3) interpretation of the significance of case to concepts, principles and theories discussed in the course.

Remember to write grammatically and expressively. If you need help with writing, write out your answer well beforehand and seek help from the ONLINE WRITING CENTER.












Objectives:

* Good knowledge of Boatright, pp. 72-89; pp. 274-298.
* Ability to apply knowledge of virtue ethics, Kantian moral theory and utilitarianism to issues, concepts and problems relating to conflict of interest and whistle-blowing.
* General knowledge of context, issues and problems in Enron case study.
* Ability to identify moral issues and make cogent moral evaluations in at least some areas of the current financial crisis.

Assignments:

* Read Boatright, pp. 72-89; pp. 274-298.
* Read lecture.
* Read articles on the Enron case at the following sites: General Article (Recommend reading this article. Then view graphs): http://www.time.com/time/business/article/0,8599,195268,00.html. Graphic Presentation of Enron partnership schemes, financing and other things: http://internet.ggu.edu/~dfelipe/enrongraphs.htm. Houston Chronicle on Enron: Many sources and information http://www.chron.com/content/chronicle/special/01/enron/.
* Read Watkins Memo to Kenneth Lay: http://energycommerce.house.gov/107/news/layletter.pdf
* The following additional articles and information on the role of analysts and brokers in the Enron scandal are recommended:
* 1. Article in Money Magazine on analyst comments and recommendations
* 2. New York Time article on Merrill Lynch involvement
* 3. Prison terms for Merrill Lynch Executives
* 4. The latest on Daniel Bayly
* 5. Goldman Sachs Settlement
* Post class discussion assignments (Discussion 1 and 2) due 8/12.
* Write 800-1000 word (minimum) discussion of topics for Case Study #4. Submit: Due 8/12.
* Recommended: View the film, The Smartest Guys in the Room, Magnolia Home Entertainment, 2005. This film is based on the book The Smartest Guys in the Room by Bethany McLean and Peter Elkind, which is also recommended reading for background on the Enron scandal; the film provides a lot of information and should be viewed with a critical mind, as one should view all documentaries.
* Recommended: take Practice Quiz on and Boatright, pp. 87-135; pp. 347-375. You may take the quiz as many times as you like and the score will not be recorded in the gradebook; however, 10 of the questions on this quiz will be asked on the final exam. Please see FINAL REVIEW for more details.
* Take Proctored Final Exam: The Proctored Final Exam may be taken anytime between 8/12 and 8/18. The Exam must be taken in person with a proctor that you must arrange with CyberCampus. Follow the instructions on the Exam Info Page. If you choose to take the exam online, also follow the instructions at the Exam Info Page. Your proctor will be given a password to access the Web based final. The portal to the Web based final is located in the Session 4, Final Exam area. Enter the exam with the password and when you are finished submit the exam.

Lecture:

Topic 1: Introduction to Enron and Financial Crisis

Topic 2: What is Whistle-Blowing?

Topic 3: What is a Conflict of Interest?

Topic 4: Ethics and Issues of Whistle-Blowing and Conflicts of Interest.

Topic #5: The Ethics of Corporations.

Lecture

In this Session we study whistle blowing, conflict of interest, the Enron scandal and ethics and corporations. In addition, we will initiate a study and discussion of the financial crisis and its ethical implications. Boatright's discussions of whistle blowing and conflict of interest are fairly straightforward. The general traits of whistle blowing and conflict of interest, and the structure of issues and arguments on these issues should be rather clear from the text.

The Enron scandal is extremely complex. In this Session I would like students to acquaint themselves with the main agents and issues of the scandal. The general article and the graphs should suffice to give folks a picture of who is accused of doing what. So, folks should know who the following people are:

* Kenneth Lay
* Jeffrey Skilling
* Andrew Fastow
* Sherron Watkins

And, folks should be generally acquainted with some of the alleged schemes to hide debt and inflate earnings. I recommend reading general information on the Enron scandal and reviewing the graphs on the LINKS page.

There are two main issues I would like to focus on with relation to Boatright:

1) What did Kenneth Lay, Skilling or Fastow do that was morally wrong? And, if anyone of these people did do something morally wrong what does it have to do with 'conflict of interest'?

2) Also, was Sherron Watkins an honest to goodness whistle-blower according to Boatright's criteria?

Also, I would like to analyze the aspects of the Enron scandal against the background of what we have learning about moral theory. Did the main actors above in this scandal violate the Categorical Imperative? Were their actions or inactions inconsistent with the principle of utility? What kind of culture and ways of life made the Enron scandal possible?

The last question relates to virtue theory, which, I think, is very relevant both to the film Wall Street and the Enron scandal. The context of the scandal is all-important. Jeffrey Skilling who had a large part in developing many of Enron's financial strategies and schemes, to this very day, maintains he did nothing wrong. Kenneth Lay also maintained his innocence even after his conviction, right up to his recent death. Why? Are these men simply saying what their attorneys advise? Or do they genuinely believe that they did nothing wrong? Skilling and the other parties to this scandal work in a certain 'culture' and 'context' that rewards certain kinds of behavior and achievements and punishes others. There are certain goals that are valued above others. In order to evaluate the scandal employing virtue theory, we must do our best to comprehend the context of these actions, and the kinds of values and beliefs people have. Examine ways of thinking and speech, as Solomon recommends. Then we can ask critical questions about what the culture and context should be.

The Financial Crisis

The current financial crisis, which now spans from at least the fall of 2008 with the collapse of Lehman Brothers, is far more complex than the Enron crisis (which is itself not easy to grasp) insofar as it involves institutions of various kinds on various levels, from quasi federal mortgage insurers Fannie Mae and Freddie Mac, to lenders like Countrywide, to real estate brokers and sales agents, appraisers, and, finally, rating agencies, investment houses, banks, hedge funds, federal regulators, Congress, and political action groups like ACORN. The dynamics and causes of the crisis are not at all easy to piece together and hotly contested. So, where should we begin? And what does this crisis have to do with ethics?

As far as the reasons and causes of the crisis are concerned, we do not have the time to investigate in any depth, and I would like to avoid become too embroiled in a debate, which would eat up class time and be more relevant to an economics class. But, in the spirit of critical engagement and historical understanding, I would like to take folks back to the last presidential campaign in which assignments of blame for the crisis were being tossed up, I will offer folks a couple of links to contentious sources on each side of the issue and allow some opinions and arguments to be aired, if folks wish. Here is a campaign speech of Barack Obama where he lays out what he believes are the primary causes of the crisis and how these causes relate to the economic 'ideology' of John McCain.

http://youtu.be/HlZt5iN96iM

(The first three or four minutes get to the heart of Obama's position, although many more details are fleshed out as the speech progresses.)

On the other side, an editorial by Stanley Kurtz in The New York Post, where he tries to make a case for Obama's complicity in causing the crisis.

http://www.nypost.com/seven/09292008/postopinion/opedcolumnists/os_dangerous_pals_131216.htm?page=0

These sources are, of course, not even the tip of the iceberg of what is available on the Web and elsewhere regarding the question of what caused the crisis, and if folks would like to bring in more references please do. I have chosen politically charged sources intentionally--it should stir up interest and emotion, which, I hope, folks can tame with rational evaluation.

Now, the question "what are the causes to the financial crisis?" is not an ethical issue, as folks should recognize immediately. But, of course, in debating this question partisan positions almost always have moral terms in mind--one side wishes to blame the other and 'blame' normally involves some kind of moral offense; fraud, greed, negligence, selfishness, shortsightedness. And, I hope that now students can distinguish between moral issues that involve action and those that involve character. "The CEO of Countrywide defrauded homeowners of millions" is a moral judgment of a particular action by a person. "Barack Obama was negligent and shortsighted" or "John McCain was insensitive to the plight or middle class Americans" are judgments of character, that is, both statements attempt to assign certain character traits, states of mind, or attitudes to the persons in question, and, of course, negative moral evaluations are implied in both cases.

Although overly extended debate of the causes of the crisis will take us far afield of what we are studying in this course, I will allow discussion of moral dimensions of the causes for the debate in discussion. If students wish to offer opinions on the causes and moral judgments on the actions or character traits of individuals, then reasons and arguments should be given for those judgments. Likewise in critiquing another student's post, students should not simply say "You're wrong" but should articulate the reasons why the student is wrong.

Besides this very general discussion, which I hope will allow folks to express opinions, articulate arguments, think, and reflect, folks may also consider an article on Credit Default Swaps. Here is the link:
http://money.cnn.com/2008/09/30/magazines/fortune/varchaver_derivatives_short.fortune/index.htm

I chose this article, which is itself an opinion piece, to focus discussion on a particular issue: the moral implications of creation and trading of derivatives. This may seem like a rather esoteric issue, but I believe we can research, discuss, and evaluate this issue in such a way that our studies of both the movie Wall Street and Enron can be brought together. In the movie Wall Street, in the famous speech of Gordon Gekko at the Teldar Paper stockholders' meeting, Gekko argues that "greed is good". Solomon discusses this idea in A Better Way to Think About Business on pages 27-9. Is greed "good" in the ways that Gekko explains? Solomon argues that greed is by its very nature a vice and therefore not morally good. Arguably the culture of Enron, its emphasis on showing profits and hiding debts by bending accounting rules until they were hardly recognizable is motivated largely by greed--that is, the excessive desire for money for its own sake at the expense of all other ends. When we examine the derivatives market for Credit Default Swaps for mortgage securities, can we make any moral evaluations regarding their creation and trading? First we should get to know what Credit Default Swaps are and how they are traded. The article, although it is written in an editorial spirit and can certainly be contested on certain points, provides fairly clear background. Then, we can consider: does the doctrine "greed is good" apply? And is "greed" really good? How would we apply virtue theory to evaluate this question? What would Solomon say? What would Aristotle say?

Finally, a second Wall Street movie, Wall Street: Money Never Sleeps , was released in 2010. Some of the issues related to the Credit Default Swap market are raised in the film, but, in my opinion, the film relates the complex facts of the crisis itself to the themes, issues and storyline of the film in a rather confusing way. But, if folks would like to view the film and comment on it that is fine as well. In this session, if you choose, you may begin to explore the moral issues involves with the crisis that continues to affect our economy almost three years after the fall of Lehman Brothers.

These will be the questions examined. You may discuss these questions in Discussion 2, and this same general subject will appear in an essay question on the final exam. Please go to FINAL REVIEW for details.