Learning to Be an Entrepreneur: Evidence from a Technology Enhanced Learning Tool - 2nd International Workshop on Evidence-Based Technology Enhanced Learning - page 67

Investment, the average return on investment, the bailouts and the score in the flows
line. The third section is composed by the fields where subjects have to input their
production and financing choices according. It deserves a close examination since it
focuses on the operational part of subjects and on their speculative decisions.
User choices. Taking into account the information from the charts and from the
other sections of the control panel subjects have to set first the level of production
“guessing” on the future level of demand. Once subjects input the figure in the pro-
duction choice field and press the return key, the software updates the balance sheet
structure: the equity base is not affected so that debt and assets adjust according to
changes in the production capacity. The Graphical User Interface reveals the level
of demand, computes the economic result and activates the appropriate choice field.
Now, the user is asked to management the balance sheet structure of the firm.
An analysis of the economic result is helpful for the understanding of the func-
tioning of this part of the software. As mentioned above, the economic result can be
either positive (profit) or negative (loss).
When a profit is realized, it can be used to refund the bank. In this case the key
decision is on the amount of profit to be used in order to reduce the debt. To this aim,
the “decrease debt” field is enabled and the user is asked to input a value. Assets are
not affected by this choice so that the reduction of debt implies an equal increase in
the equity base. Subsequently subjects have to input a value in the “decrease equity”
field. As mentioned above, we assume that the reward for the shareholders is more
expensive than the interest rate charged by the bank so that subjects can increase the
leverage ratio of the firm to the aim of obtaining a higher rate of return. Once this
choice is made, the prompt jumps to the next period production choice.
If a firm suffers a loss , the flow of event is different and users can face two
different situations which in turn depend on the amount of equity they hold (i.e.
Fig. 1 The Graphical User Interface of the web-based software model