Toy World inc

CAUCASUS UNIVERSITY
Caucasus School of Business
2020-2021 Academic year
Fall Semester
Date ___ Month ________ 2020
Final Examination
Duration of the examination 180 min.
Course Title: MBA Fi 5711 Valuation of Financial Assets

Teacher(s): Gocha Khudoian

Student’s Name, Surname:
Only the ticked elements are allowed
Class photocopy
Textbooks
All personal notes
Dictionary (for foreign students)
Personal calculator
Code
GEM/calculator
Computer
Other:

Your cell phone must be switched off and in your bag throughout the exam.

Important Rules on Holding the Examination

(Source: Regulations on the Rule of Holding Examinations)

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1. The examination process is monitored by proctors selected by the Student Service and
Educational Process Monitoring Department, among the persons entitled to observe
the examination process and the administrative staff.
2. The proctor is entitled to seat the students in accordance with the place numbers
assigned in advance and/or at his/her own discretion. The students shall obey the
instructions given by the proctor;
3. In the space allocated for holding the examination, the student shall have only a pen,
his/her ID and the material/devices listed and ticked on the examination paper front
page.
4. No student is allowed to use/wear such an accessory, an item (a hat/cap, a scarf,
headphones, a cell phone, electronic watch, etc.) which raises doubt of cheating;
5. No student shall cheat in any way during an examination. In the case of violation of
the rule (the cheating act can be revealed by the proctor himself/herself and/or be
observed through surveillance cameras), the essence of the violation committed by the
student shall be explained to him/her and be given a grade of zero in the examination.
6. The proctor shall notify the audience how much time is left till the end of the
examination in every 30 minutes;
7. In the test part of the examination paper (the so-called multiple-choice part), the
student shall circle only one answer (save for cases when the question requires giving
more than one answer); otherwise, the answer will be considered incorrect;
8. In the case, in the test part of the examination paper (the so-called multiple choice
part), the student has corrected, erased and/or circled one answer and then on the
second thought opted for another, no answer shall be considered correct.
9. During the Midterm/Final examinations, no student shall pass any materials/devices to
another student. An attempt of passing shall be considered at attempt of cheating and
both of the examinees’ papers and 20 percent shall be knocked off of the total points
obtained;
10. During the Midterm/Final examinations, speaking loudly, making any disruptive noise,
moving in the auditorium without obtaining a prior consent for doing so or committing
any act disrupting during the examination process are forbidden. In the case of such a
violation, the violator shall be knocked off 20% of the points obtained;
11. When and if needed, the examinee shall raise a hand to attract the proctor’s attention
and ask the question he/she has in a low voice. Any word or a phrase uttered loudly
with the aim of prompting a right answer to another student, shall be deemed an
attempt of cheating and the violator shall be knocked off 20% of the points obtained;
12. During the examination, no student shall leave the auditorium without prior consent
of the proctor;
13. In the case of repetition of the wrongful act envisaged by articles 7.9-7.11 of the
Regulations on the Rule of Holding Examinations, the violator’s paper shall be knocked
off 50% of the points obtained; if there is a third case of such a violation during the
same examination, the examinee shall be given grade – F in the course given.
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For notes

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MAIN OBJECTIVES OF FINAL EXAM for Toy World Case study

1) Evaluation of the trade-off between profitability versus risk and liquidity in the choice between
level and seasonal production using Example of Toy World Case Study; use company
valuation tools; - discuss, provide calculations, support and justify you answer; total of 5
points;

Questions 2-7; each 3.5 points

2) What are the Market, competitive, and operating characteristics of Toy World?

3) What are the characteristics of Toy World need for external financing?

4) What are the timing, magnitude, and duration of its borrowing needs? How certain are the
forecasts?

5) What will happen to the Toy World’s borrowing needs if it adopts level production?
o Conceptually what will happen?
o Would someone be willing to share his or her set of numbers?

6) Would you provide the loan that Toy World will need if it adopts level production? How
attractive a piece of Business is it for a Bank?

7) Are the cost savings sufficient to warrant adoption of level production?

8) From three companies given: Dynashears, Clarkson, Toy World, which you will value the most
and pick up as an investment pitch; 4 points

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