The Bus Decision: A Case Study Employing Capital Budgeting And Creative Thinking

Abstract

This paper presents a case whose setting is a regional university situated approximately twenty-five miles away from a community.  The community is home to a significant number of the university’s faculty, staff, and students.  The university is asked to provide a commuter bus to transport people to and from the community.  The university, in turn, approaches the community municipal bus service asking if it (the municipal bus service) could provide the requested route.  The case incorporates cash flow management decision making including: (1) identifying necessary information for the analysis, (2) identifying appropriate analytical tools for the analysis, and (3) performing the analysis.  This case is appropriate for first year graduate students, as well as upper level undergraduate business students.  The case is designed to be taught in one class hour and is expected to require two hours of outside preparation by the students.