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Group Project
MTI: Cash Budgeting in Times of a Sharp Business Downturn
Draft a revised cash budget and provide a detailed executive summary explaining the decisions that the group made and responses/considerations to the assignment questions below. Assignment questions:
1) Bill Young believes that because his employees were not responsible for the 9/11 attacks, they should not have to suffer loss of income as a consequence. Businesses are always subject to economic forces over which they have little or no control. Should the business response to something like the 9/11 attacks be any different from the response to “normal” fluctuations in the business cycle? If so, why and how? If not, why not? How does the example set by Aaron
Feuerstein influence your decision?
2) Bill Young has adopted a practice of sharing as much financial information with his employees as possible. How does the existence of a financial crisis affect the wisdom of such a strategy? How much information do you share with employees about the financial condition of the company? Do you tell them everything or do you sugar coat the numbers to give them hope? 3) The case cites a request from the director of marketing research at one of MTI’s client firms.
He was afraid of losing his job because he did not have any projects to work on and proposed that MTI start a telephone survey of consumer buying habits, and requested that the contract be back-dated to September 5. What do you say to the client?
4) Use the prepared template to develop a revised cash budget for MTI for the 2001-02 fiscal year. Consider all four scenarios (original, best case, middle ground, and best case). Note that the spreadsheet model incorporates Bill Young’s assumptions that [1] the entire impact of the
$199,000 reduction in revenues in Exhibit 6 occurs in September, and [2] that the salary increase and new hire are off the table until F/Y 2002. If you make changes in staffing, be prepared to
MTI: Cash Budgeting in Times of a Sharp Business Downturn
Draft a revised cash budget and provide a detailed executive summary explaining the decisions that the group made and responses/considerations to the assignment questions below. Assignment questions:
1) Bill Young believes that because his employees were not responsible for the 9/11 attacks, they should not have to suffer loss of income as a consequence. Businesses are always subject to economic forces over which they have little or no control. Should the business response to something like the 9/11 attacks be any different from the response to “normal” fluctuations in the business cycle? If so, why and how? If not, why not? How does the example set by Aaron
Feuerstein influence your decision?
2) Bill Young has adopted a practice of sharing as much financial information with his employees as possible. How does the existence of a financial crisis affect the wisdom of such a strategy? How much information do you share with employees about the financial condition of the company? Do you tell them everything or do you sugar coat the numbers to give them hope? 3) The case cites a request from the director of marketing research at one of MTI’s client firms.
He was afraid of losing his job because he did not have any projects to work on and proposed that MTI start a telephone survey of consumer buying habits, and requested that the contract be back-dated to September 5. What do you say to the client?
4) Use the prepared template to develop a revised cash budget for MTI for the 2001-02 fiscal year. Consider all four scenarios (original, best case, middle ground, and best case). Note that the spreadsheet model incorporates Bill Young’s assumptions that [1] the entire impact of the
$199,000 reduction in revenues in Exhibit 6 occurs in September, and [2] that the salary increase and new hire are off the table until F/Y 2002. If you make changes in staffing, be prepared to