If Stella buys a new car she will face an opportunity cost when he has to give up her savings because she could keep her savings in the bank for future investment as the deposit for a house rather than spend it all on a new car. That money could also be invested in shares or in a small business that will generate income or increase their value over time, and otherwise a car as time goes loses its original value. Besides vehicle maintenance could be a constant loss in her investment. Stella has to maximize her utilities in order to make a good decision and probably give up a new car and get a used vehicle and use the rest of the money for other investments or keep it as a back up in her bank account. 2.
The weakness of Kudler Fine Foods is that an IPO (Initial Public Offering) has many inherent and potential weaknesses that must be examined prior to selection as a means for expansion. An IPO is the first sale of stock by a company. There are many advantages and disadvantages for the Kudler Fine Foods to go public through the IPO. The advantages include generating more capital needed to expand their three locations The IPOs are very expensive undertaking, and a large portion of any capital acquired will be lost to this cost. Because the company must produce all financial information to the SEC many businesses find it to be very stressful and time consuming which takes time and money away from a company that is thriving like Kudler Fine Foods.
A merger would best be used in this situation since it will help lower his taxable income and he can improve his operations and competitiveness. If he feels that the investment in new manufacturing equipment will help increase profits and can take on the extra liability, then he should buy Smithon. His debt –to-equity ratio will rise and may cause him to have a hard time getting money to finance his company. But with a two year loss he is keeping his taxable income down and may be able to show investors that things are going to turn around when all operations are working together and
BUS 245-03 Assignment 1 Fall 2013 Finance/Business in the news Elizabeth Johnson Bailout of the Auto Industry-Toyota There have been so many incidents of large corporations needing bailouts within the auto industry and Toyota is just one of the many that have needed government assistance because of financial troubles. Some people may wonder if it was or is ethically right to do something like this because of all the controversy behind it like the CEO's and the higher ups misusing the money the government gave them to bailout and help their companies. The government can not predict that so in their own way it is justified to keep the economy up and running. With the economic troubles in the US still at a high, the auto industry has taken
A more difficult and time consuming effort Huffman could take to reduce exchange rate risk is to spin the rate to your advantage (Prinzel, 2013). This means when USD exchange rates are high, Huffman would need to ensure their customers are aware of the benefits they could be receiving in discounts. Relative to Huffman Trucking’s benefit with this approach, they could buy foreign exchanges when rates are low, similarly taking advantage of the same benefits their customers would
When President Barack Obama took office, he was faced with the grim reality that two of America’s largest car manufactures were near extinction. His administration responded to this reality by enacting a plan to circumvent this fate. Today, the administration’s course of action is still a contested topic, and many Americans continue to argue whether the auto bailout was in the best interest of America. The President recognized
They needed the support of the manufacturing company to have the town survive. Our Government needs to be more involved with helping the American businesses by using trade agreements and import quotas similar to the ones that Ronald Regan imposed. Regan imposed temporary quotas on some Japanese goods, trying to give American manufactures the time to compete with the reliability and efficiency of the cars arriving from Japan. However, the plan did not work as Regan had hoped it would. The Japanese opened factories in the United States.
We would have paid attention to how the economy was doing. If the market was in a recession and was going to be for a long period of time we would have manufactured a cost effective entry level electric scooter. One that would have the bare necessities to get from point a to b. An entry level price point would help fit the consumer’s needs. Once the brand was established and the market had recovered then we would start to introduce a higher end
The two strong ideas regarding improving the improving the economy reside in the republican or democratic parties. The Republican Party suggests tax breaks towards big business, while democrats believe more taxes to the upper class can create money for programs to boost government involvement in society. The better of the two, the Republican Party allows tax breaks to the wealthy to encourage spending through out the economy by allowing more money to actually reach others in need, through a process known as trickle down economics. Money being spent from the high point on the food chain causes a chain reaction to boost every business because of increased business as a result of the tax breaks. This ultimately leads to the demise of poverty
The increase of gas prices hurt the benefit of motorists. Because of the ridiculous high gas prices, many people have to choose pool car to share the transportation/gas fees with other people or use public transportation. For instance, my uncle, who lives in Foster City and works at downtown San Francisco, drives to work every day. However, when the gas prices went up, he had to take Caltrain-a kind of public transportation to go to work since it was cheaper than drive. However, it took longer time to go to work since he just needed 40 minutes to drive to work but he needed more or less two hours to go to work by Caltrain.