Horizon Corporation manufactures personal computers. The company began operations in 2013 and reported profits for the year s 2013 through 2016. Due primarily to increased competition and price slashing in the industry, 2017's income statement reported a loss of $20 million. Just before the end of the 2018 fiscal year, a memo from the company's chief financial officer to Jim Fielding, the company controller, included the following comments: If we don't do something about the large amount of unsold computers already manufactured, our auditors will require us to write them off. The resulting loss for 2018 will cause a violation of our debt covenants and force the company into bankruptcy. I suggest that you ship half of inventory to J. B. Sales Inc., in Oklahoma City. I know the company's president and he will accept the merchandise and acknowledge the shipment as a purchase. We can record the sale in 2018 which will boost profits to an acceptable level. The J. B. Sales will simply return the merchandise in 2019 after the financial statements have been issued.

Required:

Discuss the ethical dilemma faced by Jim Fielding.

Shrieves casting company is considering adding a new line to its product mix, and the capital budgeting analysis is being conducted by sidney johnson, a recently graduated mba. the production line would be set up in unused space in the main plant. the machinery’s invoice price would be approximately $200,000, another $10,000 in shipping charges would be required, and it would cost an additional $30,000 to install the equipment. the machinery has an economic life of 4 years, and shrieves has obtained a special tax ruling that places the equipment in the macrs 3-year class. the machinery is expected to have a salvage value of $25,000 after 4 years of use. the new line would generate incremental sales of 1,250 units per year for 4 years at an incremental cost of $100 per unit in the first year, excluding depreciation. each unit can be sold for $200 in the first year. the sales price and cost are both expected to increase by 3% per year due to inflation. further, to handle the new line, the firm’s net working capital would have to increase by an amount equal to 12% of sales revenues. the firm’s tax rate is 40%, and its overall weighted average cost of capital, which is the risk-adjusted cost of capital for an average project (r), is 10%. define “incremental cash flow.” (1) should you subtract interest expense or dividends when calculating project cash flow?

Which of the following is an example of search costs? a.) driving to a faraway place to find available goods b.) buying goods in some special way that is outside the normal channels c.) paying a premium cost for goods d.) selling extra goods for a discount price

Beagle autos is known for its affordable and reliable brand of consumer vehicles. because its shareholders expect to see an improved rate of growth in the coming years, beagle's executives have decided to diversify the company's range of products so that at least 40 percent of the firm's revenue is generated by new business units. however, the company's resources, capabilities, and competencies are limited to producing other forms of motorized vehicles, such as motorcycles and all-terrain vehicles (atvs). which type of corporate diversification strategy should beagle pursue?