Mini case: Shiney Corp. Mine Shiney Corp. leases a mine from Ally, Inc. During September of 2020, Shiney Corp. extracted 50,000 ounces of a special bauxite that Shiney Corp sells in bulk to aluminum manufacturers. The CFO of Shiney Corp. determined that the cost to extract the special bauxite was somewhere between $42 and $50 an ounce during September 2020. The cost of the special bauxite is dependent on how Shiney allocates costs among various mines the company operates. Three regular customers have offered to purchase the special bauxite for $125 an ounce. A valuation consultant estimated the fair market value of the special bauxite at $139 an ounce. The market price for standard aluminum bauxite is $128 an ounce.

 To finance operations, Shiney has also borrowed $5,000,000 from Ally, Inc. The terms of the loan require Shiney Corp. to provide quarterly financial statements that demonstrate that Shiney's ratio of total assets to total liabilities is above 3.0 to 1. Shiney Corp. sold all of its bauxite mined before September 2020. 

1) Determine the research questions Shiney Corp. may need help to answer. 

2) Find ASC that will help you to answer the most important research question. 

3) Make a recommendation to Shiney Corp.

Answer rating: 100% (QA)

1 The main factor that Shiney should be concerned with is fulfilling the criteria of the loan ie mai... View the full answer