Should Mr. Jones convert Smithon to an S corporation and change the fiscal year end to a calendar year end? A: Converting Smithon to an S corporation has merit if the goal is for Smithon to remain controlled by a small number of shareholders. However, the equipment deductions for the corporation may be more valuable than it would be to Johnson personally. Either way, Smithon's value to Johnson will be the same, if he purchases Smithon outright. Changing to a calendar year end has little useful effect, and it requires that Smithon produce a short-year tax return from Dec to Jan, which is a relatively unnecessary administrative expense.
This will lead to lower prices as average costs went down. (econ of scale diagram) Economies of scale can occur to different reasons. For example technical, which is if one firm has low fixed costs, then mergers will have low average costs, which is good. Also they might have better interest rates when merged together. A vertical merger would normally benefit less from economies of scale, as it will not receive an advantage from technical economies of scale.
A firm’s value depends on the positive net income generated in the past. True False A firm’s value depends on the firm’s ability to generate positive cash flows now and in the future True False When determining the value of a firm, which of the following statements is true? • Inversters are risk neutral. Other things equal they prefer to pay more stocks that are less risky and have uncertain cash flows • Investers love risk. Other things equal they prefer to pay more for stocks that are more risky and have uncertain cash flows.
However if the behaviour is judged as immoral such as joining others in cheating there is less evidence of conformity as the costs are perceived as greater. Kohlberg found that individuals who are able to resist pressure to conform tend to be more morally advanced. Individuals can resist obedience if they have an ally who also opposes the authority figure. In Milgram’s study when the participant was given two allies that refused to continue giving shocks, only 10% of participants continued to the 450 volts shock level. Milgram claims that the presence of allies who resist an authority figure makes individuals more confident in their ability to do the same.
It is also possible that managers do not adopt maximising behaviour at all, perhaps “satisficing” in response to shareholder discipline or that the policy of the firm is the result of complex interactions between various stakeholders. An For a firm to profit maximise, it would be the case that it sets output where marginal cost is equal to marginal revenue. If an additional unit of output were to be produced beyond this, it would add more to the firm’s costs of production than its revenue, thus reducing profit. The diagram below shows profit maximising output and the corresponding price, read from the demand curve. It also shows some other possible objectives for the firm.
During the course of the bidding process, it became evident that Mr. Larsen had an ulterior motive for selecting Mr. Allison. Mr. Larsen was accustomed to making unethical business decisions and wanted to select someone who could be easily managed and persuaded. This analysis identifies and discusses the technical, ethical, legal, contractual and project management issues Gary Allison faced as Project Manager of the Orion Shield Project. Mr. Allison’s inexperience became evident when he spent the majority of his time doing research rather than properly managing his resources. Cost overruns and delays with project milestones were the direct result of Mr. Larsen and Gary Allison’s inability to effectively manage the project.
If you were TDC's CEO, how would you react toTelmore's entry? * Lower prices to compete against Telmore * Differentiate from Telmore to maintain or increase customer willingness to pay * Do nothing Does Telmore have any advantage relative to TDC? How would you describe its advantage? Telmore has a competitive advantage over TDC due to its lower, lean cost structure, completely different value chain and a unique fact of having only one plan, which facilitated low-cost structure. Telmore could reduce its costs due to offering its customers only one product – pre-paid service.
If they were to consolidate and attempt to strengthen their products or reap without investing the gains they would yield would be far less than if they were to spend the time and money to thoroughly develop new products. As there is not any specific information on the items in question in the decision branches I have to base my determination off of the market reactions and predicted gains of each branch. At the same time the developing thoroughly branch also has higher predicted gains on the good and moderate market reaction branches while also have a lower probability of poor market reaction than the other decision
If an employee is already overloaded with work the last thing needed is a heaver workload. The person is afraid of extra work pressure. When people feel that a certain change requires that they work more, it is too much pressure (Calberg, 2007). Many employees may feel that they have lost control over their job. Employees are the driving force of any operation and to lose employee moral means, poor productions, and a negative workforce.
Lower risks and higher chances for maximized earnings proved to be a major concern in this decision (University of Phoenix, 2004). Castor Standard has lower deductibles that fall into the suitable range for what ConstructIt’s employees can afford (University of Phoenix, 2004). Castor Standard carries a lower risk factor when provided to a company with ConstructIt’s statistics and demographics. Castor Standard does not cover pre-existing conditions and is suitable for ConstrucIt but this does not provide much revenue for CCHP (University of Phoenix, 2004). The total cost of premiums charged to ConstructIt are $3,428, the earnings from this are $3.43 million (University of Phoenix, 2004).