in western Europe. And the Macedonian government had
continued to pursue EU membership aggressively, arguing
that the true economic future of the country rested with
the EU. EU membership meant the euro as the currency
of choice.
Case Questions
1. Why has Nova International used the U.S. dollar as the
currency of invoice since its inception? Would it make sense
to change this to either the Macedonian denar or the euro?
2. Take a hard look at the income statement presented in
Exhibit 2. What is your assessment of the school’s business
prospects? Why have revenues seemingly fallen in recent
years? What costs have the greatest impact on the school’s
financial results over the period shown?
3. What would you recommend that Ivan Novakovski do
about tuition? If you believe Nova should change to the euro
or denar, at what rate would you set the new tuition
payment?
Note
1. One of the negative accoutrements of having a large
expatriate consumer base, one containing the children of
many foreign government and business officials, was that security
measures in the post–9/11 world were extensive. For
example, all of Nova’s glass window exterior had been
replaced with bullet-proof glass as an added precaution.
Although Nova had never had a single criminal or terrorist
event, the investment was considered necessary by the
Novakovski family to assure parents that their children were
in a safe and secure environment.