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BUSINESS 121 WINTER 2013.doc

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Wilfrid Laurier University
Leanne Hagarty

BUSINESS 121 WINTER 2013 FINAL EXAM REVIEW GUIDE Date: SATURDAY, APRIL 13 TH Time: 12:00P.M. TO 2:30 P.M. Writing Locations are posted on the university website. Students who did not write the midterm exam, and were granted an exception (by their professor) will write a cumulative final exam worth 50%. Those writing a cumulative final exam will be notified by their professor of their writing location and will have to report to the main proctor at the start of the exam to be seated at the appropriate exam. (Students writing in the ALC need to contact their professor to ensure that the cumulative exam is supplied to the ALC ahead of time.) Any student that is required to write a cumulative final but writes the regular final instead, will only receive a 25% weighting on the exam, defaulting the midterm exam to a mark of 0. Important Notice: Anyone who is not able to write the exam on the scheduled date must petition through the Undergraduate Business Programs Office. Deferrals for final exams are handled centrally, not through the professor for the course. Approximate Mark Allocation (to be confirmed in review class): Multiple Choice = 20 marks, Short Answer = 40 marks, Case = 5 marks, Problems = 15 marks Total: 80 marks TOPICS TO BE COVERED: Main concepts from text and readings will be tested with multiple choice questions (as indicated with blue text), unless otherwise indicated. Lecture material & some lab manual material will be tested in more depth (as indicated in black text) with a combination of multiple choice, short-answer questions, and problems. Material that is testable through problems is indicated in red text. FINANCE Text Unit 3 (Chapter 14): Using Financial Information & Accounting and Lab Manual Readings (pages 213-230 and 236-248) • will NOT be tested separately but supports lecture material Lecture Material – covered after Reading Week; Lab Manual Exercises pages 262-266, 286-291, and 304-305 • Evaluating financial performance – analytical measures at different stages of life cycle. Why evaluate financial performance?1. Real human and financial capital must be ‘rented’ from owners. 2. A venture’s financial objective is to increase value. Life cycle stage: Development and startup stages: how quickly the venture uses cash  Development and Startup Issues:  How quickly the venture uses cash  The venture’s ability to meet short-term financial obligations (pay bills)  The length of the operating/working capital cycle  Additional Survival Issues:  The venture’s potential to employ and repay debt  The venture’s ability to provide a return on invested capital?  Rapid-growth stage • Process of ratio analysis • Monthly net cash burn and build rates – how long before more external financing needed? • Ratios (calculations on formula sheet attached only) – liquidity, conversion period, leverage – pros and cons, profitability and efficiency • Cost-volume-profit analysis – decision point (when more profitable) – operating leverage, decision applications (impact on profit) NEGOTIATING Lab Manual Readings pages 276-285 Lecture Material – Week 9 • EASY process : Engage: Recognize you are in a negotiation and quickly review the viable strategies. Assess: Evaluate your tendency to use each of the negotiation strategies, as well as the tendencies of the other side. Strategize: Select the proper strategy for this particular negotiation. Your One Minute Drill: Each time you begin a negotiation situation, take a minute to review the 3 steps. • Proactive • Negotiation strategy matrix Low High cooperati Cooperati on on • • , 2 categories of collaboratorseactive 1. Sages and Dreamers -“unilateral collaboration is de facto accommodation” 2. check strength of accommodation tendency vs competition tendency • Basic interaction styles and how they relate to negotiation tendencies Fast Pace Task Focus People Focus Slow Pace • 5 basic negotiating strategies – when to use each, including compromise • Avoidance o Minimal issue  Recognize it may grow in importance  Do it in way that demonstrates investment in relationship o Superior option readily available elsewhere  Objections are a sign of interest • Accommodation o In significantly weaker bargaining position – no leverage  Can improve leverage with knowledge o How you accommodate is as important as when  “this time around we would be willing to consider…” and don’t make excuses • Competition o Opponent not inclined or capable of collaborating  Need senior players in loop to get at true needs o Not worth the effort  Be careful to look for true potential of negotiation • Collaboration o When situation presents a significant opportunity with capable and willing decision-makers on all sides  Win-win-win  80/20 rule o Requires preparation, need identification, and candor – trust o Internal collaboration is prerequisite for external collaboration • Principled vs positional bargaining; distributive vs integrative bargaining Typical neg0tiations are ‘positional’ o People state their positions – what they want o Strategy is ‘distributive’  Competing, compromising, or accommodating Principled negotiations use an ‘integrative’ /collaborative strategy o Produce a wise agreement o Eff
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