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Business 110 at HCC

Business terminology and other fun things.

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Transcript of Business 110 at HCC

Chapter 1 Terminology
1st Day Videos
http://employee.heartland.edu/tmullin/BUSN110/FirstDayVideosAssortedTopics.htm
Chapter 1 is an overview of business. The chapter includes a section on technology and the evolution of business. Your assignment for chapter 1 is to explore the idea of how technology has changed the evolution of business or how you think it will change businesses in the future. You can interpret the assignment as you wish (for this assignment) but could, for example, take how have hand held devices changed how businesses do business or how they have changed how consumers make their purchases.

Another idea is to find some emerging technology that will change businesses as we now know it. Watch this video on the rollup laptop": or this one on car windows: or this one on surface technologies:

You could write about new changes in cell phones and what the changes mean or even relate the changes in business with the "first day" videos we watched. Be creative and have fun with this assignment. Please type your answer here in the textbox rather than uploading an attached file (it will be quicker for me to read and grade). 10 points
Chapter 1 Homework
Business 110 - Mullin
Chapter 1
Business 110 - Mullin
Chapter 2
Chapter 2 Homework
Economics "the dismal science"
Micro vs. Macro Economics (people and businesses vs. nations.
Resource Development: increase resources
Adam Smith - father of economics
Invisible Hand - self gain becomes social and economic benefit for all
[why entrepreneurs exist]
Capitalism foundations pg 35
Free market
supply vs. demand
equilibrium determines market price
Supply Curve, Demand curve, equilibrium point
Competition
Perfect competition
Monopolistic (free market)
Oligopoly
Monopoly
Socialism
Brain Drain
Communism
Trend is to mixed economies - pg 45
Gross Domestic Product: Goods and Product produced in a given year
Unemployment Rate
Inflation
DisInflation (declining inflation)
Staglation (slow economy with rising prices)
Consumer Price Index (pace of inflation)
Producer Price Index (prices at wholesale level)
Business Cycle
recession - 2 or more consecutive quarters of decline, prices fall, unemployment goes up, businesses fail.
Depression - severe recession
Fiscal Policy
National debt
Keynesian exonomic theory - Increase governmental spending and cut taxes.
Monetary policy
Chapter 2 Terminology
Chapter 2 is our economics chapter. The concept of capitalism is based on a free market yet socialism is concerned about overseeing some of the major factors of production for the welfare of society as a whole.

here is a link that explains the two forms of economics (with a little on communism). Please write what you think of the different forms of an economy as they pertain to today's world. type your answer here in the textbox rather than uploading an attached file (it will be quicker for me to read and grade). 10 points

http://www.wisegeek.com/what-is-the-difference-between-capitalism-and-socialism.htm
Business 110 - Mullin
Chapter 3
Chapter 3 Terminology
Global Market
Imports vs. Exports
Free trade
Comparative advantage theory: efficiency
Absolute Advantage: monopoly on a resource
Balance of trade: $ value
Trade surplus: exports>imports
Trade deficit: exports<imports
Balance of Payments: Goods/services, tourism, foreign aid, military, foreign investment
Dumping
Licensing: firm gives license to foreign company to make product
Contract Manufacturing: foreign company makes product puts US label on it.
Joint venture: 2+ companies make a product
Strategic Alliance: 2+ companies help each other
Foreign Direct Investment: buying property in other countries
Foreign Subsidiary: Parent company owns susidiary in another country.
Multinational Corporation: multiple companies in multiple countries
Sovereign wealth funds: investment controlled by governments of foreign companies
Lost in Translation pg 73
Exchange rate
Devaluation
Trade Protectionism
Tariffs
Import Quotas
Embargos
WTO: world trade organization: Mediators of international trade issues
Common Market: Trading block: has agreement for a group, eliminating tariffs, taxes, etc.
Outsourcing/Offshore Outsourcing
Chapter 3 Homework
Chapter 3 is about Globalization. For this chapter's assignment, discuss what you think about globalization and is it good or not good. Some would say that we need to take care of our own. Others would say that we are all dependent upon each other and it is our moral duty to think of bettering everyone on the planet, not just our nations. Some feel that globalization will help reduce corruption since corrupt officials will be accountable to other nations not just their own people. Read an article from the Internet and discuss what you find. Include the facts (with citations, please) where appropriate, voice your opinion and support your opinion. Then challenge others on the discussion board. 10 points will be awarded on the discussion board for the quality of your postings.
Syllabus
http://news.bbc.co.uk/2/shared/spl/hi/guides/457000/457022/html/
This article might be a good place to start your research of Chapter 3's homework...
Chapter 3 video
Chapter 2 Video
Chapter 1 video
Skateboard Car
Flying Car
Old Lecture Notes
Old Lecture Notes
In the News:


Classical video:

Who owns the federal banking system (congressional hearing):

map: http://www.federalreserve.gov/pubs/frseries/frseri3.htm

bad feds:

history
the Federal Reserve & Monetary Policy
http://employee.heartland.edu/tmullin/BUSN110/Videos/01_CIRQUE.wmv
Cirque du soleil
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch2-OpportunityInternational.mp4
http://employee.heartland.edu/tmullin/BUSN110/Videos/CH3_MHill.mp4
Business Project 1
Goods and Services
Building Wealth
Profit and Loss
Risk
Standard of Living
Quality of Life
Stakeholders
Outsourcing
NonProfit Organizations
Entrepreneurship
Factors of Production (Used to create wealth):
Land, Labor, Capital, Entrepreneurship, Knowledge
Business Environment:
Economic and legal, Technological, Competitive, Social -->
E commerce
Databases
Identity theft
Empowerment
Diversity
Demography-study of human population
Greening
Evolution of Business: Agriculture, Production, Service, Information
Rollup
Laptop
Car Windows as Monitors
Surface Technology
Business 110 - Mullin
Chapter 4
Chapter 4 Terminology
Ethical Relativism
Kant
Utilitarianism
Aristotle
Locke
Descarte
Pythagorus
Hume
Heraclitus and
Parmenides
Plato
Epicurus and Zino
Chapter 4 Homework
For this chapter's assignment, I would like you to read anything that you can find on classical ethical theories (utilitarian, Kant, justice theory, etc.) and summarize in just a paragraph or two what you found out. Remember that you have a PowerPoint that I borrowed from the Internet in project #1's Word document from the PhD professor that teaches ethics. We briefly looked at it in class.
Then I want you to take a situation that you think that you are right and using the ethical theory you read about, justify why you are right. You can use a disagreement with family, friends, significant others for this assignment if you wish such as justifying why you are in school and not just working a 40 hour a week job. You can also use a current event such as the raising of student loan interest rates.
This is a classical 1st assignment in any ethics class. I hope you will ask questions in class so that I can help you understand what you are doing for this assignment. So just ask away......

3 minute Videos on Ethical Theories
Chapter 4 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch4-CellPhonesForSoldiers.mp4
Chapter 5
Business 110 - Mullin
Chapter 5 Terminology
Chapter 5 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch5-PODS.mp4
Chapter 5 Homework
For assignment 5, I want you to look up the particulars of creating a LLC. Let's say that you graduate and can't find a job. Since you are highly educated, you decide to start your own business using a LLC structure. What would you have to do to set it up and why would you use this format over a sole proprietor or other structure. Be specific and not a one liner that says it limits my liability (0 points for one liners). You can find articles on the Internet but you may also want to go to the IRS.gov website for more info. You can also read your textbook for information. =)
Enjoy!


http://www.irs.gov/
Limited Liability Company
Cultural Relativism/Lost In Translation
http://www.businessinsider.com/13-hilarious-slogans-lost-in-translation-2011-10?op=1
Chapter 6
Business 110 - Mullin
Chapter 6 Terminology
Chapter 6 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch6-PillowPets.mp4
Chapter 6 Homework
For Chapter 6 Homework, I would like you to take the Business Plan on page 165 of your book and write a paragraph or two for each section on a small business idea that you have. A full business plan is 25-50 pages long so this is just an introductory to what each section is about (hence a couple of paragraphs each). the idea here is that if you write just a couple of paragraphs for each section, you will have to think about what should be in each section. Choose any idea that you have about some business that you potentially would like to create. We will discuss this more in class so come prepared with some ideas.

Chapter 7
Business 110 - Mullin
Chapter 7 Terminology
Chapter 7 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch7-Zappos.mp4
Chapter 7 Homework
Continuing with the business plan you started in chapter 6, write a mission statement, goals and objectives for your company. The mission statement should clearly say why you are in business. The goals of the company should be 3-7 abstract ideas of what you need to do to be successful with this company. It is not an exhaustive list. think of this list as your critical success factors or what you would you would have to do well for your company to be more successful than the next guy. For each goal, give a couple of objectives (concrete steps as opposed to abstract steps) on how you would achieve your company goals. We will discuss this more in detail in class so again, just come to class for more details.

Chapter 8
Business 110 - Mullin
Chapter 8 Terminology
Chapter 8 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch8-NewBelgiumBrewery.mp4
Chapter 8 Homework
There is no homework for chapter 8 since it is not one of the chapters in the book but has a couple of questions on your next exam. We will only concentrate on a few terms that will be given in class.

Business 110 - Mullin
Chapter 10
Business 110 - Mullin
Chapter 10 Terminology
Chapter 10 video
Chapter 10 Homework
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch10-ContainerStore.mp4
Biaggi's Example
Incentives
Disincentives
Extrinsic
Intrinsic
Psychological
always saying we can be better than we are
not understanding Maslow's Hierarchy of Needs
Equity Theory doesn't exist
Expectancy Theory is non existant
No follow thru on rules so don't know which to follow
Excessive payout of tips
Full time people get best sections, not equal
Inequality such as parking, who gets in trouble for eating, why so many "special" people who aren't special?
Biaggi Dollars
For Most Club Biaggis
Bingo
Trio Apps
Check Average
Movie Tickets
Biaggi hats
Free Appetizer/dessert
Golf Balls
Wine Seminars
Menu Knowledge
More Thank yous
Let people know where they stand (no news in good news
Get out of Jail Free card
Motivations that vary with age groups.
More detailed examples (written out, reviewable, better organized)
Bloom's Taxonomy
Chapter 11
Business 110 - Mullin
Chapter 11 Terminology
Chapter 11 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch11-SAS.mp4
Chapter 11 Homework
Look at the following Top 10 Interview Questions. Write out how you would answer at least 5 of them in an actual job interview (think before you write). Don't cheat! Write out your answers first then go to this website and click on the hyperlink for "best answers" and see what the professionals suggest..

http://jobsearch.about.com/od/interviewquestionsanswers/a/top-10-interview-questions.htm

1. What is your greatest strength?
2. What is your greatest weakness?
3. How do you handle stress and pressure?
4. Describe a difficult work situation / project and how you overcame it.
5. How do you evaluate success?
6.Why are you leaving or have left your job?
7. Why do you want this job?
8. Why should we hire you?
9. What are your goals for the future?
10. Tell me about yourself.


•HRM is the process of determining human resource needs then recruiting, selecting, developing, motivating, evaluating, compensating and scheduling employees to achieve organizational goals. See model
Human Resource Management
Read the following 2 pages (pdf file) and then take a situation where you are unmotivated and explain what you could do to turn your lack of motivation into a success story.
Chapter 13
Business 110 - Mullin
Chapter 13 Terminology
Chapter 13 video
Chapter 13 Homework
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch13-Energizer.mp4
Chapter 14
Business 110 - Mullin
Chapter 14 Terminology
Chapter 14 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch14-DreamDinners.mp4
Chapter 14 Homework
Chapter 16
Business 110 - Mullin
Chapter 16 Terminology
Chapter 16 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/ch16-Groupon.mp4
Chapter 16 Homework
Prezis
Create an account at Prezi.com
Start with an idea:
Pull together some text, images, video, graphics, sounds that you would use to convey the information that you want to demonstrate.
Make the Prezi

Solar system
Simpsons
Music albums
Cinematic movies
U.S. Presidents
Timeline of anything- war, ?
Classical Art History - Louvre
Building a house
Anything done in steps or a process
Diet and what to eat
Meaning of song lyrics/poem
Idioms/Origins of

Marketing - the activity ... that have value for customers...
Marketing Eras:
Production - make as much as you can
Sales - sell the product
Marketing Concept -Customer, service, profit
Customer Relationship management
Marketing mix:
Product - designing a product to meet the consumer needs
Price - name, packaging, setting an appropriate price
Place - Getting product to the right place, distribution system, when and where the product is available
Promotion - Developing an effective promotional strategy
Marketing Research: primary vs. secondary data
Focus Group
The consumer market:
market segmentation (define groups with similar interests)
target marketing (who you want to sell to)
geographic segmentation (cities, counties, etc.)
demographic segmentation (age, income, etc.)
Psycho graphic segmentation ( values, attitudes, interests)
niche markets (small, special interests)
Decision Making Process:
problem recognition
information search
alternative evaluation
purchase/no purchase
post-purchase evaluation
Make a list of all the places in town where you can buy pizza. Group them into categories and identify
who is their target market?
how are the groups segmented?
what are the attributes of each segmentation?
who makes the decision to buy the pizza?
what price will they be willing to pay?
(identify any other factors that you feel are relevant.)
Value - good quality at a fair price
Total Product Offer - everything the customer evaluates when deciding to buy something
Product Lines - physically similar or similar market (paper cups, paper bowls, napkins
Product Mix - combination of product lines (disposable items where paper products would be part of the mix)
Product differentiation - real or perceived differences
Convenience goods and services - quick stops, gum, candy
Shopping goods and services - people take time to compare
Specialty goods and services
Unsought goods and services - don't know they need them until they need them such as cemetery plots.
Packaging the product -->
Brand name
trademarks
Generic goods
Brand equity - symbolizes the quality, e.g. Apple
Brand loyalty - purchase every time
Brand awareness - people know the product
Brand association - e.g. Nike and athletes
Break Even Analysis -->
Product Life cycle
Mitsubishi sells the Miev (mitsubishi I, electric vehicle) and Chevy sells the Volt. We will discuss in class the particulars of these products that I researched when I was thinking about buying one. Here is a web page I created for a friend of mine:

http://employee.heartland.edu/tmullin/VoltMiev.pdf

Your homework assignment is to write up what you perceive as the total product offer from your perspective. Give all pertinent details.
How has social media affected other medias like newspapers and television? How would you evaluate the quality of what your friends say is a good deal or a great purchase as compared to what advertisements can convey to you when you are interested in making a purchase? Give all the good and bad points of this discussion and what limitations you would put on any of these medias. We will discuss this in class so come get the details of this assignment there.
Promotional mix - all the promotional tools an organization uses
Advertising - paid or unpaid communication about a product
or service-->
Medias -->
Product Placement - tv and movies where the audience sees the product.
Personal Selling
Word of Mouth
Chapter 17
Business 110 - Mullin
Chapter 17 Terminology
Chapter 17 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch17-GoodWill.mp4
Chapter 17 Homework
Chapter 18
Business 110 - Mullin
Chapter 18 Terminology
Chapter 18 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch18-TomAndEddies.mp4
Chapter 18 Homework
Chapter 19
Business 110 - Mullin
Chapter 19 Terminology
Chapter 19 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch19-MorningStar.mp4
Chapter 19 Homework
Chapter 20
Business 110 - Mullin
Chapter 20 Terminology
Chapter 20 video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch20-BankingDisaster.mp4
Chapter 20 Homework
Appendix A
Business 110 - Mullin
Appendix A Terminology
Appendix A video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch5-PODS.mp4
Appendix A Homework
Appendix B
Business 110 - Mullin
Appendix B Terminology
Appendix B video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch5-PODS.mp4
Appendix B Homework
Appendix C
Business 110 - Mullin
Appendix C Terminology
Appendix C video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch5-PODS.mp4
Appendix C Homework
Appendix D
Business 110 - Mullin
Appendix D Terminology
Appendix D video
http://employee.heartland.edu/tmullin/BUSN110/Videos/Ch5-PODS.mp4
Appendix D Homework
Voluntary: Legal procedures initiated by a debtor.

Involuntary: Bankruptcy procedures filed by a debtor’s creditors.

Types of Bankruptcy

The Act Forbids:

Contracts, combinations, or conspiracies in restraint of trade

Actual monopolies or attempts to monopolize any part of trade or commerce

The Sherman Act

An offer is made.

There is a voluntary acceptance of the offer.

Both parties give consideration.

Both parties are competent.

The contract must involve a legal act.

The contract is in proper form.

When is Contract
Law Legally Binding

Income taxes

Property taxes

Sales taxes

Excise taxes

Types of Taxes

The Uniform Commercial Code

Warranties

Express warranties

Implied warranties

Negotiable Instruments

Sales Law

Estimated Patents Filed

Source: Investor’s Business Daily, February 21, 2006

Top Patent Filers ‘05

A wrongful act that causes injury to another person’s body, property, or reputation.

Negligence

Product Liability

Tort Law

Business Law

Statutory Law

Common Law

Types of Laws

Source: www.irs.gov

Gross Collections from
Tax Returns (FY 2004)

Source: www.irs.gov

Number of Tax Returns
(FY 2004)

Right to safety

Right to be informed

Right to choose

Right to be heard

4 Basic Rights
of Consumers

Specific performance

Payment of damages

Discharge of obligation

What Occurs With
Breach of Contract

Source: Investor’s Business Daily, January 20, 2004

Ranked By Thousands of Patents

Top Patent
Recipients ‘03

Source: U.S. Chamber of Commerce

Delaware
Nebraska
Virginia
Iowa
Connecticut

Best States For
‘Legal Fairness’

Source: USA Today

Bankruptcies

Source: U.S. Chamber of Commerce

West Virginia
2. Louisiana
3. Mississippi
4. Alabama
5. Hawaii

Worst States For
‘Legal Fairness’

BONUS
CHAPTER

A

Working With
The Legal
Environment
Of Business

Nickels McHugh McHugh

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/Irwin
Understanding Business, 8e

1-*

(Source: U.S. Department of Justice; American Trial Lawyers Association)

Company

Year

Settlement

Ford Motor Company

1978

$125 million in punitive damages to child burned in collision

A. H. Robins

1987

Birth-control devices recalled

Playtex Company

1988

$10 Million because of fatality from toxic shock syndrome

Jack In The Box

1993

Assessed large damages from fatality from e-coli poisoning

Sara Lee Corporation

1998

Recall after 15 deaths from food poisoning

General Motors

1999

$4.8 billion from faulty fuel-tank case

Major Tobacco Firms

2004

$10 billion settlement for smoking cessation programs

Major Product
Liability Cases

Word Processor
Desktop Publishing
Spreadsheet Programs
Database Programs
Personal Information Managers
Graphics
Communications Programs
Message Center Software
Accounting
Integrated Programs
Groupware- Networks

Types of Popular Software

Business Process Information
Physical-world observations
Biological data
Public data
Data that indicates personal preferences or intentions

Types of Information

How IT is
Changing Business

Human Resources

Security

Privacy

Stability

IT & Management

Commercially Distributed

Shareware

Freeware

Software Technology

Intranet
Extranet
Virtual Private Network
Enterprise Portals
Broadband Technology
Internet 2

The ‘Nets

Quality

Completeness

Timeliness

Relevance

Information Characteristics

Increase Efficiency

Gain a Competitive Advantage

Find New Customers & Provide Added Value

Plan, Lead, Organize, & Control

Why Business Needs Information Technology

Personal Data Assistants

Wireless Information Appliances

Networks

Computers
Pagers
Cellular Phones
Printers
Scanners
Fax

Hardware Technology

Source: USA Today

How Much Online?

Source: Investor’s Business Daily, January 24, 2006

Online Categories
Biggest Sales Growth

Source: www.sophos.com, 2005

W32/Zafi-D
W32/Netsky-P
W32/Sober-Z
W32/Sober-N
W32/Zafi-B

2005’s Top 5
Computer Viruses

Disadvantages
Dislocated Feeling
Loss of Energy
Turn Work Off?
Part-Time Alternative

Advantages
Less Travel Time
Save Money
Smaller/Less
Expensive Office
Disabled Workers

Telecommuting

Source: USA Today

Why Buy
Technological Items?

Source: Yankolovich Partners

Site is updated frequently

Links to other relevant sites

Easy to find what you are looking for

Site responds quickly to inquiries

Site downloads quickly

Most Important
Web Site Characteristics

Source: CFO-IT, Spring 2003

In Millions

Number of
Workers Telecommuting

In Millions

= projected

Source: USA Today

Amount Of Tax Returns
Filed Electronically

BONUS
CHAPTER

B

Using
Technology
to Manage
Information

Nickels McHugh McHugh

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/Irwin
Understanding Business, 8e

1-*

1995+= Knowledge Technology

1990s= Information Technology

1970s= Data Processing

1980s= Information Systems

Changing Role of IT

Group life insurance
Owner or key executive life insurance
Retirement and pension plans
Credit life insurance

Types of Life Insurance

The rule of indemnity says that an insured person or organization cannot collect more than the actual loss from an insurable risk.

Rule of Indemnity

The policymaker must have an insurable interest.
The loss should be measurable.
The chance of loss should be measurable.
The loss should be accidental.
The risk should be dispersed.
The insurance company can set standards for accepting the risk.

Guidelines for Evaluating if Risk is Insurable

Market Risk

Political Risk

Personal Risk

Operational Risk

Types of Uninsurable Risk

Many companies and municipalities have turned to self-insurance.
Companies turn to this option because they either can’t find or can’t afford conventional property/casualty policies.
Firms set aside money to cover routine claims and buy only “catastrophe” insurance policies to cover big losses.

Self-Insuring Against Risk

Reduce the risk

Avoid the risk

Self-insure against the risk

Buy insurance against the risk

Options After Risk
is Identified

Pure Risk
Potential for Loss with no Potential for Gain

Speculative Risk
Potential for Loss with Possibility for Gain

Types of Risk

Source: www.iii.org

Average Expenditures for
Auto Insurance in the U.S.

Fire
Automobile
Homeowner’s
Computer coverage
Professional liability
Business interruption
Nonperformance loss protection
Criminal loss protection
Commercial credit insurance
Title insurance

Types of Property
& Liability Insurance

Liability
Other Business Insurance
Life Insurance for Business
Home-Based Business

Health
HMO
PPO
MSA
Disability
Workers’ Compensation

Types of Insurance

Buy Insurance
Uninsurable Risk
Insurable Risk
Law of Large Numbers
Rule of Indemnity
Sources of Insurance

Types of Risk
Reduce/Avoid Risk
Loss-Prevention Program
Risk Management Strategy
Self-Insure

Managing Risk

2005 numbers

(Source: www.iii.org)

Workplace Deaths

(Source: www.iii.org)

September 11, 2001 (U.S.): Hijacked airliners crashed into the World Trade Center and the Pentagon caused $20.7 billion insured property losses.
April 24, 1993 (U.K.): Bomb exploded near NatWest tower in the financial district caused $974 million insured property losses.

Worst Terrorist Acts

= projection

(Source: Insurance Information Estimates)

Costliest Disasters

(Source: Bureau of Labor Statistics)

Riskiest Jobs

Source: www.iii.org

World insurance premiums totaled $3.4 trillion in 2005 according to Swiss Re.
The Highline/National Association of Insurance Commissioners data show U.S. insurance premiums totaled $947.9 billion in 2005.
In 2005, five hurricanes (Katrina, Wilma, Rita, Ophelia and Dennis) caused $57.3 billion in damages, or 94% of total 2005 losses.

Insurance Industry

BONUS
CHAPTER

C

Managing
Risk

Nickels McHugh McHugh

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/Irwin
Understanding Business, 8e

1-*

Insurance needs decline as you grow
older:

Children are grown.
Mortgage is low or completely paid off.
Debts are paid off.
Insurance needs are few.
Retirement income is needed.

Why Buy Term Insurance?

Insurance needs in early years are high:

Children are young and need money for education.
Mortgage is high relative to income.
Often there are auto payments and other bills to pay.
Loss of income would be disastrous.

Why Buy Term Insurance?

Social Security
Individual Retirement Accounts (IRA)
Traditional
Roth
401(K) Plans
Keogh Plans
Financial Planners
Estate planning

Retirement

Life
Term
Whole Life
Variable Life
Annuity
Health/Disability
Homeowner’s & Renter’s
Other

Insurance

List everything you own
Note present market value
Total assets
List all creditors
Total liabilities
Subtract liabilities from assets

How to Figure
Your Net Worth

Take Financial Assets Inventory
Track Expenses
Prepare Budget
Pay Off Debts
Start a Savings Plan
Borrow Only To Increase Value

Controlling Assets

Select a Guardian

Prepare a Will

Prepare a Durable Power of Attorney

Financial Planner / Attorney

Estate Planning

Source: Schwab On Investing

Why People Begin
Financial Planning

Source: USA TODAY Snapshots

Top Concerns of Americans

Source: USA TODAY Snapshots

Amount Of Debt
At Graduation

Disadvantages
Temptation to Overspend
Items Become More Expensive
Danger of Excessive Debt
Tie Up Future Income
Missed Payments Lead to Poor Credit Ratings
High Interest Rates & Annual Fees

Advantages
Convenience
Financial Emergencies
Purchase Goods Immediately
Track Purchases
Safer Than Carrying Cash

Consumer Credit Cards

Source: USA TODAY Snapshots

How Much Well-Paid
Employees Save

Source: USA TODAY Snapshots

What People Would Do
With An Extra $1,000

Create/Apply Strategy
Real Estate – Safe
Taxes & Home Ownership
Savings
Manage Credit

Building a Financial Base

Savings
Per Month


$48.00

$40.00


$20.00
$15.00
$24.00
$147.00
X48 months

$7,056.00

Alternate Choice
Cost Per Month

Quick Trip’s Cappuccino
$.60 for 20 days = $12.00
Lunch brought from home
$2.00 for 20 days = $40.00

Generic bottled water
$.50 for 20 days = $10.00
Listen to your old CD’s = $0.00
Old Navy T-shirt = $10.00
Total savings per month

Total savings through
4 years of college

First Choice
Cost Per Month

Starbucks caffe latte
$3.00 for 20 days = $60.00
Fast-food lunch of burger, fries, and soft drink
$4.00 for 20 days = $80.00
Evian bottled water
$1.50 for 20 days = $30.00
CD = $15.00
Banana Republic T-shirt = $34.00

Possible
Cost-Saving Choices

Source: Schwab On Investing

Income Sources
For Retirees

Source: 10 Awesome Facts About Money (and life!), Reliastar

Choose a card that charges your interest on your “balance due,” not on your “average daily balance”
Choose a card that has a “grace period”
Don’t let gift offers & discounts confuse you

Find a card with a low interest rate
Compare the yearly charges
Check for special fees or penalty payments
Some cards earn you money

Choosing a Credit Card

BONUS
CHAPTER

D

Managing
Personal
Finances

Nickels McHugh McHugh

© 2008 The McGraw-Hill Companies, Inc., All Rights Reserved.

McGraw-Hill/Irwin
Understanding Business, 8e

1-*

What is Accounting?
Financial Accounting vs. Managerial
CPA, CMA
Annual Report
Public vs. Private Accounting
Sarbanes Oxley Act
Auditing: internal, external (independent), CIA
Not for Profit and governmental Accounting
Double Entry Bookkeeping System: A = L + OE
Journal vs. Ledger
Income Statement, Statement of Retained Earnings, Balance Sheet, Statement of Cash Flows
Ratio Analysis: Liquidity, Debt Ratio, Profitability ratios, Activity Ratios
Use the pdf file below for a list of financial ratios with an explanation.

use the balance sheet on the Prezi and calculate some of the ratios. Explain what the numbers mean. If you want, here is a website that explains the ratios: http://www.investopedia.com/university/ratios/

My interest here is that you do a couple of them to understand how it all comes together. You do not need to do them all.

PDF file on Financial Ratios
Financial Management
Finance - function of acquiring funds and managing those funds
Financial Planning - short term and long term
Budgets: capital, cash, operating or master
Capital Expenditures
Debt Financing - bonds
Equity Financing - Common stock
Trade Credit
Line of credit
Unsecured vs. Secured loans
Factoring A/R
Commercial Paper - unsecured notes of $100k or more due < 270 days
Risk
Venture Capital
Leverage
Cost of capital

Read an article of your choice from the Internet on Venture Capital. Give a recap of what you find that is good/bad about using this type of financing.
none
None
None
None
Imagine that you won the lottery but didn't hit the big jackpot (you were missing one number). Still, the amount that you will receive in a lump sum is sizeable. You want to spend some of the money in a couple of years to move to a new house and put the rest in your retirement so that you know it is "solid". How would you invest this money?

You can wait to answer this homework assignment after our guest speaker on the last day of class but you will have to have it done by that Friday midnight at the latest.

In the News:


Classical video:

Who owns the federal banking system (congressional hearing):

map: http://www.federalreserve.gov/pubs/frseries/frseri3.htm

bad feds:

history
the Federal Reserve & Monetary Policy
If you viewed these videos when we first talked about them in Chapter 2, you can just quickly go thru them to refresh your memory. Otherwise, watch the videos and then voice your opinion as to the need for the Federal Reserve System.
Function of securities market is to help businesses find financing and offer investors a place to trade these securities.
IPO - initial public offering
Investment bankers\
Markets: Over the counter, NASDAQ, NYSE, etc.
SEC - security and exchange commission is part of the federal government
Stock Certificate shows ownership
Dividend is reduction of equity to seller, revenue to buyer
Common Stock vs. Preferred Stock
Sinking fund - used to pay off long term liabilities
Callable and Convertible
Strategy: Choosing the right Risk, Yield, Duration
Diversification
Stock Splits
bond Ratings -->
Stock Quote -->
Bonds and why they are different
Mutual Funds
Dow Jones industrial Average - the average cost d stocks to give an indication of the direction of the market over time.

Money - anything that people will accept for payment of goods and services
Bartering
Money Supply - the amount of money the Federal Reserve Bank makes available for people to buy goods and services
M1=money that can be accessed quickly such as coins, paper, checks
M2 = M1 + savings, money market accounts, mutual funds, CDs.
12 Federal Reserve District Banks -->
How does the Federal Reserve Control the Money Supply? Discussion!!
Demand deposits, CDs
Pension funds
EFTs - Electronic Funds Transfers
Debit Cards
Smart Card - combines everything--credit card, debit card, phone card, drivers license card and more.
Line of Credit
Harvard
Business School
Interview Questions
Company: Campus Cab
Mission: We are dedicated to establishing the safest, highest quality of transportation to students.
Goals
1. Have efficient employees who know the area well and work in a speedy, timely manner.
A .Make a big deal of speedy service.
B. Offer rewards as incentive for fast transportation
2. Provide students with an alternative source of transportation to help avoid drinking and driving.
A. Associate with the universities.
B. Associate with campus organizations.
C. Associate with fraternities and sororities.
3, Charge lower fares than my competitors(Taxis and party buses).
A. Charge $2 fares to every student,
B. Give free ride to customers after every 10 rides.
4. Ensure that vehicles and communication tools are maintained well.
A. Emphasize safety to drivers to preserve vehicles.
B. Clean and check on commuication tools often.
5. Have a thoroughly thought about plan of action everyday with goals that will help improve performance.
A. Make clear goals.
B. Congratulate when goals are met.
C. Stay focused and driven.
6. Work towards building enough capital to expand to other campuses nationwide.
A. Strive for success.
B. Make calculated decisions that are thoroughly thought out and reviewed.
C. Never give up.
one student's response
Full transcript