Mini Case (P. 45)

The three aspects of cash flows the affect the value of any investment are the amount of expected cash flows, the timing of the cash flow stream, and the risk of the cash flows.

b) Describe the organizational forms a company might have as it evolves from a start-up to a major corporation. List the advantages and disadvantages of each form.

Corporate governance in itself has no single definition but common principles which it should follow. For example in 1994 the most agreed term for corporate governance was “the process of supervision and control intended to ensure that the company’s management acts in accordance with the interest of shareholders” (Parkinson, 1994)1. Corporate governance code is not a direct set of rules but a self-regulated framework which businesses choose to follow. This code has continued to change in the past 20 years in accordance with what is happening in the business world. For example the Enron scandal caused reform in corporate governance with the Higgs Report which corrected the issues which were necessary. Although it does not quickly fix problems, it gives a better framework to

Kenny is a teenager who has experienced uncontrollable bodily and facial movements, various uncontrolled vocalizations, and other compulsions such as excessive hand washing and wringing. He has been treated with Clonidine, Haldol, pimozide and buspirone. This patient was diagnosed with Tourette’s Syndrome. Clonidine is a vasodilator that allows for blood to flow more easily to the brain. This lowers blood pressure and helps treat the tics the patient experiences(1). Haldol and Pimozide are antipsychotics that blocks dopamine receptors in the brain. This would help treat the compulsive behaviors (2). Buspirone is used to treat anxiety disorders. It binds to serotonin receptors in

The global market has shown exemplary contribution to the growth of the world's development until recently where financial crisis have been bombarding most economies. As a result, the cost of livelihood had been unaffordable to many who live below the dollar. The monetary crisis has led to the lowering of many currencies against the dollar, hence advancing the economy crisis to most worldwide nations. This turn of events has been attributed to the lack of exercise of business and management ethics in many multinational companies, firms and investments. Financial scandals have been the order of the past twenty years leading to the sweep over of the flourishing global market. The scandals, especially in larger companies and multinational, are spurred by inter and intra-conflicts in their organizational structures.

Mike Stephan is a first-year staff auditor at Willis and Adams. Mike recently graduated with his undergraduate degree in accounting and was excited about his new job at Willis and Adams. Mike came from a smaller school that typically does not get a lot of attention from campus recruiters. Mike was pleased to get an interview and then an offer from Willis and Adams. From the beginning, Mike was impressed with the firm’s culture and he felt that it would be a great fit for him professionally. Throughout his junior year, he worked hard to reach out to the firm’s recruiters to demonstrate a sincere interest in the firm. In the end, Mike was one of only two students that Willis and Adams hired from his school. Mike believed that his school’s

H. They interact with intrinsic value which is the sum of all the future expected free cash flows when converted into today’s dollars.

According to Gitman, the goal of the firm, and therefore of all managers and employees, is to maximize the wealth of the owners for whom it is being operated (2009). The financial manager is responsible for acquiring sources of financing and allocate amongst competitive investment alternatives. The ultimate goal is to invest in projects yielding higher returns than amount of financing used to invest, so profits can be used satisfy claims and increase shareholder wealth. The issues facing financial managers are therefore to 1) increase sources of financing from investors and 2) increase shareholder wealth while maintaining a

When compared with the industry, the inventory turnover of S&S Air of 21.43 times is well above the industry upper quartile of 10.89 times. This indicates that S&S Air is much more efficient than the industry average at inventory management.

Ethics is defined as what is right and what is wrong. Every business should behave ethically. The moral principles that guide the way a business behaves are business Ethics. Ethics are moral guidelines to people or to an organisation which govern good behaviour. So behaving ethically is doing what is morally right. Doing an ethical business may always be not profitable but it will be more beneficial to company and the people involved in company as well as the people who are getting influenced by the company. If a company is acting ethically then it is trying to differentiate between right and wrong and then chose the right decision for everyone. It is very easy it identify any unethical

Firms have an ethical responsibility to provide a safe working environment, to avoid polluting the air or water, and to produce safe products. The most significant cost-increasing actions will have to be put on a mandatory to ensure that the burden falls uniformly on all businesses.

Ethical consideration is required when conducting business in the 21st century for many reasons. First of all, there is nothing wrong from being ethical, in the contrary you will gain people’s trust and chances for your company to be more reputable are much higher.

But then the question that arises is what are the agency problems solved by them and why are boards the solution to these problems? The agency problem in any corporation is between the management and the shareholders. And the problem arises because of lack of control of shareholders on the management and the possibility of the management cheating the shareholders. The possible solution to this problem is either providing the management with incentive or strengthening the position of shareholders to tackle the problem on their own. But then the question arises- who provides the management with the incentives and how the shareholders are strengthened. Thus the board can be seen as a bridge or a medium, as suggested by literature, between

As explained by Schelker (2013), the agency problem between the owners and the management of a firm is at the heart of the corporate governance literature. Hence, there is a need for a

‘Corporate social responsibility’ (CSR) means that the firm has wider responsibilities in relation to objectives and people apart from the owners or shareholders (Beal and Goyen 2005). These responsibilities are achieved when the firm adapts all of its practices to ensure that it operates in ways that meet, or exceed, the ethical, legal, commercial and public expectations that society has of business. Objectives often associated with CSR include a responsibility to manage natural assets sustainably and not to pollute by chemical discharge, smell, noise, dust or other irritants; fair treatment of employees and ethical attitude towards clients. The other people include employees, customers, suppliers,