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Resource Allocation. Resources. Allocation of resources Marketing Human Financial Technical Political capital Short Term Plans Long Term Plans. Marketing. Constituencies Students Faculty Donors Government officials Leadership responsibility Plan Research Positional Goals
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Resources • Allocation of resources • Marketing • Human • Financial • Technical • Political capital • Short Term Plans • Long Term Plans
Marketing • Constituencies • Students • Faculty • Donors • Government officials • Leadership responsibility • Plan • Research • Positional • Goals • Implementation
Human Resource Needs • Personnel selection/recruitment • Management and Incentives • Organizational Chart • Managerial style
Financial Resource Allocation • Balance Sheet • Income Statements • Operating Budget • Cash Budget • Capital Budget • Sources and Uses of Funds • Present value
Present value Y = Income P = Present value R = Interest rate Rate of return Discount rate Capitalization rate
Time value of money Y = P . R Y1 = P + PR Y1 = P (1 + R) Y1 (1+R) = P
Time value of moneyYear 2 Y2 = Y1 + Y1 . R Y2 = P (1 + R) + [P (1 + R) ] . R Y2 = P + PR + PR+PR2 Y2 = P + 2PR + PR2 Y2 = P (1 + 2R + R2) Y2 = P (1 + R) 2 Y2 (1+R) 2 = P
Y1 Y2 Y3 YN 1 + R (1 + R)2 (1 + R)3 (1 + R)N Time Value of MoneyGeneral Formulations P = … + + N = ∞ P = Y R
Bank example • Y = P . R • $100 = $1000 @ 10% Interest
Applications • Home Mortgages • Loans/Borrowings • Stocks/Bonds • Buildings • Laboratories • Endowment
Role of Information Technology • National Science Foundation (NSF) • Education and Research • Pervasive: • Commerce • Health • Economic • Impact on developing world