A Financial Simulation Of An International Business Graduate School

Given the cost involved in establishing an international business graduate school, the objective of this study is to evaluate the financial viability of starting an MBA program in a foreign location. In 2004, the University of Delaware in partnership with Flag International, LLC was awarded a contract to offer an MBA program in Bosnia and Herzegovina (BiH). Based on the experience gained in implementing this US AID project, this study develops a financial simulation model that can be used to evaluate the sustainability of foreign-based MBA programs. While the deterministic model indicates that the model may be a viable venture with minimal start-up costs, the results of the stochastic simulation indicate that significant risk does exist with the potential for significant negative returns if the venture is not managed properly.