Title page for ETD etd-10232001-121519


Type of Document Master's Thesis
Author Blacka, Aaron E.
Author's Email Address ablacka@vt.edu
URN etd-10232001-121519
Title Financing University Conference Centers: A Multiple Case Study Approach
Degree Master of Science
Department Hospitality and Tourism Management
Advisory Committee
Advisor Name Title
Olsen, Michael D. Committee Chair
Kumar, Raman Committee Member
Mihalik, Brian J. Committee Member
Keywords
  • four pillars
  • rate of return
  • cost of capital
  • cash flow
  • finance
  • university conference centers
  • project valuation
  • case study
  • risk
  • investment
Date of Defense 2001-09-26
Availability unrestricted
Abstract
The Co-Alignment Principle is a strategic management framework that guides value-added management. The model suggests that firms will perform successfully if they scan the environment for forces driving change and allocate their resources to industry-leading competitive methods that address environmental trends. When financing and managing a capital project, a firm's managers must think strategically and consider the "four pillars" of project valuation and management: (1) estimating future cash flows over the project's life cycle, (2) determining an appropriate cost of capital/rate of return, (3) assessing and managing operational and financial risk, and (4) investing in the appropriate materials and resources. The four pillars of project valuation and management act as a framework to guide this investigation on university conference center financing. The overall research question of this study asks how university officials make conference center investment decisions based on the four pillars of project valuation and management.

To answer the research questions posed by this investigation, this study adopted a multiple case study approach, in which officials at five universities were interviewed about their universities' conference center projects. Interviews with two executive-level personnel at each university along with multiple sources of written documentation provided the basis for conclusions.

Evidence from the data collection phase of this project indicates that universities follow similar procedures for financing their conference centers. For instance, they take advantage of low-cost, tax-exempt debt and private contributions to fund these capital projects. In addition, they place little emphasis on sensitivity analyses for cash flow projections and ignore the opportunity costs of capital. University conference center financing practices with respect to the four pillars of project valuation and management are not consistent with the recommendations set forth by traditional financial principles. This study concludes that universities should improve their strategic thinking and pay more attention to the four pillars in order to increase the viability of their conference center businesses.

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