Macroeconomics of Agriculture



Macroeconomics of Agriculture

Agricultural Economics 489-689

Spring 2010

Team Presentations

1. Each borrowing team must develop a startup company. It must bear some relationship to the U.S. food and fiber system. Begin developing the characteristics of your startup company, including the product or service to be marketed, assumptions about the market itself, and the talents of the founders of this company. The firm’s product or service should be (1) legal and (2) in good taste.

2. Each lending team must develop the characteristics of its agricultural loan portfolio, credit standards, where it gets its loanable funds from, and its loan review policies.

3. If your team represents a borrower applying for a loan, select team members to fulfill the following roles:

➢ President and CEO,

➢ CFO,

➢ VP for Marketing,

➢ VP for Production, and

➢ Chief Economist

If your team represents a lender making an agriculturally-related loan, select team members to fulfill the following roles:

➢ Senior VP for Portfolio Management,

➢ Member of the Board of Directors,

➢ VP for Credit,

➢ VP for Operations and Marketing, and

➢ VP for Research and Credit Analysis

These are the members of your management team. Each is expected to play an important role in completing your project, making your presentation, and completing your final report.

4. Begin developing a Powerpoint show for your presentation. Screen captures of product photos, bank photos, etc. and other features that help promote interest in what you have to say about your firm or your lending institution. See me if you have questions.

5. Each “borrower and lender pair” pair will assume current economic conditions exist in the economy. More will be said about this below under the “Basic economic assumptions and hints” heading.

6. The borrowing team will have 20 minutes to present their credit application to the lending team and the rest of the class. The lending team will then have 20 minutes to present its analysis of the loan request and their decision about whether or not to make the loan.

7. The borrowing team must present its final credit application including data entries in the class model to the lending team a minimum of one week prior to the scheduled presentation. Each borrowing team must also inform the lending team about the general nature of the loan request (i.e., the firm’s product(s) or service, the structure of the market for these products and services, etc.), and what you intend to use the proceeds of the loan for two weeks prior to the scheduled presentation.

8. The borrowing team will be given 5 minutes to ask questions about the lending decision after the lending team makes its presentation, and the lending team will have 5 minutes for their response. I will serve as the regulator overseeing the quality of loan decisions, and will have 10-15 minutes of questions after both presentations have been made once both presentations are completed. I will expect some “informed” questions from the audience as well.

9. Again, each presentation should be 20 minutes in length. A penalty will be assessed to the team’s grade if the actual time taken deviates more than two minutes from this timing. At the end of the hour, I will collect individual presentation evaluation forms from all students not directly involved in that day’s presentations.

10. I want a copy of your Power Point presentation the day before the scheduled day of the presentation so we can make sure it is successfully pushed out to our website.

11. Each team will be given a score on their presentation, 100 points being the highest score possible. Both style and substance are important. This makeup of this score will be as follows:

a) an assessment of the oral presentation (30 points),

b) an assessment of the screen show design (20 points),

c) an assessment of the soundness of the economic content of your analysis (50 points),

10. Each team will also turn in an executive summary report at the end of the semester. This report is worth 50 points. Greatest emphasis should be placed on the financial analysis of your startup company (borrower) or credit decision (lender). The report should document your analysis and recommendations to the firm. An appendix to this report should contain copies of key graphs/slides that were instrumental in conducting your analysis as well as tables and charts instrumental to your assessment. This report will be due the day of the 3rd hour exam.

11. Finally, I will distribute a form with the 3rd hour exam asking the membership of each team to complete a confidential assessment of the team and each member’s contributions.

Basic economic assumptions and hints:

1. The startup firm and lending institution are assumed to be located in Central Texas.

2. The general condition of the economy, product markets and financial markets are assumed to be as they are this semester.

3. Macroeconomic policy, farm policy and regulatory rules are also assumed to be as they are this semester.

4. You do not have to include all team members in the actual presentation All team members should be present during the presentation, and those members with specific management responsibilities should be prepared to answer questions.

5. Do NOT read from note cards!!!!! Be familiar with your role in the presentation. Use the screen as “talking points” is necessary.

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Who is in charge? Who is investing in the project?

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