Simulation Scoring

GRADING FACTORS FOR PERFORMANCE REPORT
(from Business Week magazine)

Sales	20 %
Income After Tax	10 %
Earnings Per Share	20 %
Return on Sales	5%
Return on Assets	25 %
Return on Equity	10 %
Stock Price	10 %

Keating will serve as Banker’s Representative, as Bond broker, as Stock broker, as the Commercial Property broker, United Micromatic Workers Union President, and, most importantly, as Chairman of the Board.

Fines
Failure to turn in a decision on time will cost $10,000 and I will rerun your last quarter’s decision. A virus on your decision will cost you $10,000 if you turn it in for processing. I will be happy to otherwise remove viruses at no charge. Failure to turn in the decision printout with your decision costs $5,000. No current company decision password on the current decision printout costs $5,000. The game administrator may make additional charges for any last-minute decision changes and corrections.

Banking Policies
The Money Bank is the only bank you have access to. Otherwise, you must borrow from Louie.

Short Term Loans
Each company will have a short term line of credit of $300,000 at the current short-term interest rate of 10%. Computer-generated loans (from Louie the Loan-Shark) will cost double interest. No limit exists for computer-generated loans.

Short Term Investments
The current short term investment rate is 5.0%.

Long Term Loans (Bonds)
The Moody's interest rate for Bonds is 10% for Quarter 10. The Money Bank will not issue long term notes to finance operating expenses, preferring their use to be applied to capital formation. The Money Bank will issue no bonds for less than $250,000. The game administrator must approve all bond issues. The bank will not finance operating expenses with any bonds. The bank will issue money only for plant construction, purchase of existing plant, technological improvements, and funds necessary to retire an existing bond.

Stock Transactions
Broker charges: Buy/sell =10%

Stock Sales (Issues)
The Board of Directors will not allow a company to issue more than 50% more shares than the current total during your term as officers. Use the current market price of your stock, then deduct the brokerage fees to determine the minimum price amount for your stock price decision. For example, if your current market price is $11.30, you would deduct $1.13 for broker's fee. You would then enter a price of $10.17 for your new stock issue. You cannot issue any new stock if current market price for stock minus broker's charges is less than $10.00.

Stock Purchases (Retirement)
Use the current market price of your stock and add the broker's charges. For example, if current market price is $11.30 add 10% for broker's fees which results in a $12.43 price to retire stock. Stock can be retired at any price but is limited to 10,000 shares/quarter. The total number of shares outstanding can never be less than 120,000. The Micromatic program will not allow you to retire stock if that retirement would make the retained earnings on the balance sheet negative.

Dividends
The Board of Directors will not allow you to pay any dividends that would make the retained earnings negative. If both dividend methods are selected for dividends, the Micromatic program will select the larger amount of the two methods. You cannot pay dividends less than $.01/share.

Labor
Your current labor contract expires at the end of Quarter 16. Your industry must negotiate a new contract before your current contract expires. Expect labor demands by about Quarter 13.

Loss of Plant Capacity
I refer you to the bottom of page 16 in the Micromatic text. Plant capacity lasts only 20 quarters until it is worn out. Your original 8000 unit capacity plant started in Quarter 0 and is finished at the end of Q19, etc. You also lose capacity after Q23, Q25, and Q27. Don’t be caught without capacity. It’s embarrassing.

Sale of Plant Capacity
The selling price of any existing plant capacity will be the book value. Book value = (original cost - accumulated depreciation). Oldest plant capacity by area must be sold first.

Sale of Technological Improvements
If you sell your capital investments, you can only sell all investment in an area or none. Keating will pay only book value in a sale.