State of the Economi in Bosnia - Case Study Example

? Case study Case study Taking into account the deva d of the economy in Bosnia and comparing various projections that govern the operation of the models, the one year model is the one that is favourable. This is because the most of the projections which involves the cost of its operation is favourable. It also ensures that the graduates accomplish their master’s degree in a short time and thus enable them to access the job market in the shortest time possible. This short program has various disadvantages, which includes generation, of little revenue on a student basis compared with the long program model. The shorter model will ensure that the students finish as quickly as possible and give room for new ones to join the school. This would provide an opportunity to the College to earn extra income and complement the one that would be earned by the long program. The short model would offer ten courses in a period of eleven months while the long would offer sixteen courses in a period twenty months. Most of the students would be interested in the ten courses model since they pay a premium over the other schools offering graduate management education. Since most of the students want to concentrate on other issues like seeking for employment, people would adopt the shorter model since it would take those two years which is a relatively short period to accomplish their studies. Discounted Cash Flow Analysis A Discounted Cash Flow method of valuation estimates the credibility of an investment that is worth investing. In a case where the value that one arrives at through this DCF method is higher than the cost of investment, then the opportunity is viable. Discounted Cash Flow= 425,000-87,250/ (1+0.15) + 350,000-87250/ (1+0.15)2 = 735,899.375 US dollars. One achieves this amount after taking the revenue that the organization realizes after an enrolment of 25 students for both programs. The tuition for each cohort is $ 17,000 for the short program and $ 14,000 for the long program. The students prefer the short program since taking part of the program is of little value with regard to enhancement of their career prospects. The students should ensure that they complete their course since it if finishing that counts with MBA. One finds that the models are realistic and worth investing in since the DCF amount is favourable. Since the amount of revenue that these two projects would generate, is higher than the cost of investing, the project is, therefore, viable and worth venturing. Consideration of other firms who offer Masters in Business Administration, in the country, also provides vital information concerning investing in the project. It will provide the expected price that should be charged in the market and the expected level of expenses that the college should incur in the process of running the programs. Pros of the long program The long program will generate reasonable profits to the school in case a reasonable number of students join the program. This will ensure that the school develops due to availability of resources that it develops through making profits. It is also cheaper where compared with a short program and students can easily raise the fees with a lot of struggles. The administration distributes tuition fee over a longer duration of time. The students undertaking the long program has a possibility of performing well since they have few courses to concentrate on in a long duration of time. Cons of the long program The long program takes a reasonably longer time when compared to the short program. It requires a large amount of capital for investment since the number of costs involved in running the program is higher. Pros of the short program The short program saves time for students and equips them with the MBA degree which they will use to secure employment opportunities in the job market. This gives them competitive advantage when compared with the long program students who spend a lot of time in school. The students also finish their course in a relatively short time and thus give room for other students to join the school. Cons of the short program The program is a bit expensive when compared with the long program and this discourages students from choosing it due to the nature of high cost. It also generates fewer turnovers when compared to the long program and, therefore, considered unfavourable. In an organization where the management has an interest of making a profit, they cannot adopt either of these programs because it does not generate the expected profits. References Accessed from Asebuss. Retrieved on 5th May 2012. Available at http://www.asebuss.ro Read More