Thursday 6:00 – 9:00
1- I think that the company’s process for assessing capital building ideas was handled in an efficient manner. They gathered the needed information from the right people to build their decision based on.
4- Yes there is an economic justification for the replacement of the machine, because there is a growth in revenues and growth in earning after tax. Also, IRR is 20% exceeds the 8% required return. NPV is also positive with a value of $25,282.
5- Yes the original machine should be replaced for the same reasons mentioned in answer number four.
6- The company’s potential reduction of its workforce would’ve been unethical if the city hadn’t picked up on its economic growth. For the past twenty years, Ted Schadler has taken upon himself to solve the youth and unemployment issues. He hired people when jobs in the city where insufficient. Now that the number of jobs are sufficient, the reduced workforce won’t be unemployed. Therefore, the company is lien with ethics given the city’s current economic performance.
7- Change of technology is essential for meeting the objectives of stakeholders, although, it’s the main reason behind creating new skills. New skills provide an opportunity to invest in recruiting and training new skillful workforce.
8- The Schadler’s concern over the ethics question would be pretty high, but after viewing the differences in economic performance between now and twenty years ago, Mr. Schadler shouldn’t have serious concerns