2 discussions w6 – 5010 | mba5010 | Capella University

Please see attachment for instructions on the 2 discussions.

2 Discussions

Discussion 1: Performance Measurement

This week’s discussion is about valuation of company assets for purposes of computing return on investment (ROI). Use the following scenario for your discussion:

A company owns two identical apartment buildings.

· Both buildings were built at the same time.

· The first building was acquired by the company ten years ago.

· The second building was acquired by the company two years ago at a higher price.

· The net book value of the first building will be much lower than the net book value of the second building due to accumulated depreciation and a lower purchase price.

· Each building has a different manager.

For your post, prepare 3 paragraphs about managing these properties. Discuss how to measure the ROIs so that the manager of the older building does not show a much higher ROI, even if actual job performance is worse in terms of keeping the units rented and containing maintenance costs. 

Discussion 2: Ethics and ROI

For this discussion, consider the following scenario:

You are the division manager of a company with four departments. Your company evaluates department managers on the basis of return on investment (ROI), with investment measured by net book value (that is, original cost minus depreciation). You have a favorite person you want to put in a place where she can achieve a high ROI. You know if she is the manager of the older division, where the net book value is low, she will achieve a high ROI.

Post a discussion of 3 paragraphs about the ethics of this scenario. Consider for your post:

· The ethics of what you are about to do.

· The ethics of not bringing the measure of ROI with the investment defined as net book value to the attention of management.

Refer to the following article for a good overview of ethical considerations that will help inform your post:

· Robin, D. (2009). Toward an applied meaning for ethics in business. Journal of Business Ethics, 89(1), 139–150. (In attachments)