Why can it be difficult to develop an accurate cost-benefit analysis? What factors may be difficult to quantify? How can this be handled? Is this something that should just be avoided altogether? What are the consequences of that approach?
Ratchet Manufacturing anticipates total sales for August, September, and October of $230,000, $240,000, and $250,500 respectively. Cash sales are normally 25% of total sales and the remaining sales are on credit. All credit sales are collected in the first month after the sale. Compute the amount...
Return to the game given by the payoff matrix in Problem. Two classmates A and B are assigned an extra credit group project. Each student can choose to Shirk or Work. If one or more players choose Work, the project is completed and provides each with extra credit valued at 4 payoff units each. The...
Bigbee Company currently has no debt; it is 100% equity financed. With its current capital structure, the stock’s beta is 1.5. The company is looking to take on some debt to buy back some stock, but management is unsure of how much debt to issue. You have been asked to calculate the optimal...
Sam’s Electronics Universe has discovered and investigated a kickback fraud perpetrated by its purchasing agent. The fraud lasted eight months and cost the company $2 million in excess inventory purchases. The perpetrator personally benefited by receiving kickbacks of $780,000. Your boss wants to...