Each student is required to post a response to problem CP10-5 or CP10-6 on pages 572-573: Consider both CP10-5 & 6 before you choose the one you want to address! Then collect the facts and answer the question in the last sentence Please elaborate in your original posting so we can follow for rationale and logic. CP10-5 LO10-1 57 Critical Thinking Cases Evaluating an Ethical Dilemma You work for a small company that is considering investing in a new artificial intelligence business. Financial projections suggest that the company will be able to earn in excess of $40 million per year on an investment of $100 million. The company president suggests borrowing the money by issuing bonds that will carry a 7 percent interest rate. He says, "This is better than printing money! We won't have to invest a penny of our own money, and we get to keep $33 million per year after we pay interest to the bondholders." As you think about the proposed transaction, you feel a little uncomfortable about taking advantage of the creditors in this fashion. You feel that it must be wrong to earn such a high return by using money that belongs to other people. Is this an ethical business transaction? CP10-6 57 LO10-1 Evaluating an Ethical Dilemma Assume that you are a portfolio manager for a large money management company. The majority of the money you manage is from retired school teachers who depend on the income you earn on their investments. You have invested a significant amount of money in the bonds of a large corporation and have just received a call from the company's president explaining that it is unable to meet its current interest obligations because of deteriorating business operations related to a global pandemic. The president has a recovery plan that will take at least two years. During that time, the company will not be able to pay interest on the bonds and, she admits, if the plan does not work, bondholders will probably lose more than half of their money. As a creditor, you can force the company into immediate bankruptcy and probably get back at least 90 percent of the bondholders' money. You also know that your decision will cause at least 10,000 people to lose their jobs if the company ceases operations. Given only these two options, what should you do? Page 573