ADMS 4900 Lecture Notes - Lecture 8: Waste Management (Corporation), Pension, Stakeholder Theory

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byzantiumbeaver144

30 Nov 2017

School

York University

Department

Administrative Studies

Course

ADMS 4900

Professor

Barry O' Brien

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Document Summary

In tideekleen waste management inc. (tk)"s situatio(cid:374), as a(cid:374) ethi(cid:272)al (cid:272)o(cid:374)sulta(cid:374)t i (cid:449)ould ad(cid:448)ise. Halo to take option c, as i think it is the most ethical and social responsible course of action. I chose optio(cid:374) c (cid:271)ased o(cid:374) the stakeholder"s theor(cid:455), rights a(cid:374)d justi(cid:272)e, ra(cid:449)ls" approa(cid:272)h and norman bowie"s principle. Option a states that if the company tk goes on bankrupt, tk would have to use its own asset to pay for their liability. But if their liability is greater than asset, it implies that creditors might not receive their goods, it would results that their workers might lose their wages, pensions and those injury workers would not get their health benefit. In option a, it is clearly shown that they have the plan of giving up on their old facilities and focus on the new one but this is not the greatest solution for everyone.

Related Questions

BUSI 320 Comprehensive Problem 3 SUMMER D

Use what you have learned about the time value of money to analyze each of the following decisions:

Decision #1: Which set of Cash Flows is worth more now?

Assume that your grandmother wants to give you generous gift. She wants you to choose which one of the following sets of cash flows you would like to receive:

Option A: Receive a one-time gift of $ 9000 today.

Option B: Receive a $1400 gift each year for the next 10 years. The first $1400 gift would be

received 1 year from today.

Option C: Receive a one-time gift of $18,000 10 years from today.

Compute the Present Value of each of these options if you expect the interest rate to be 3% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect the interest rate to be 7% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Compute the Present Value of each of these options if you expect to be able to earn 10% annually for the next 10 years. Which of these options does financial theory suggest you should choose?

Option A would be worth $__________ today.

Option B would be worth $__________ today.

Option C would be worth $__________ today.

Financial theory supports choosing Option _______

Decision #2 begins at the top of page 2!

Decision #2: Planning for Retirement

Tom and Tricia are 22, newly married, and ready to embark on the journey of life. They both plan to retire 45 years from today. Because their budget seems tight right now, they had been thinking that they would wait at least 10 years and then start investing $1800 per year to prepare for retirement. Tricia just told Tom, though, that she had heard that they would actually have more money the day they retire if they put $1800 per year away for the next 10 years - and then simply let that money sit for the next 35 years without any additional payments â then they would have MORE when they retired than if they waited 10 years to start investing for retirement and then made yearly payments for 35 years (as they originally planned to do). Please help Tom and Tricia make an informed decision:

Assume that all payments are made at the END of the year, and that the rate of return on all yearly investments will be 8% annually.

(Please do NOT ROUND when entering âRatesâ for any of the questions below)

How much money will Tom and Tricia have in 45 years if they do nothing for the next 10 years, then put $1800 per year away for the remaining 35 years?

How much money will Tom and Tricia have in 10 years if they put $1800 per year away for the next 10 years?

b2) How much will the amount you just computed grow to if it remains invested for the remaining

35 years, but without any additional yearly deposits being made?

c)How much money will Tom and Tricia have in 45 years if they put $1800 per year away for each of the next 45 years? (This amount can be referred to as their âretirement nest eggâ)

Using your solution to question C, what is the value in today's dollars, assuming 3% average inflation, of Tom and Tricia's retirement nest egg? (âTodayâ Tom and Tricia are 22 years old. Retirement is 45 years away!)

e)If Tom and Tricia wait 25 years (after the kids are raised!) before they put anything away for retirement, how much will they have to put away at the end of each year for 20 years assuming an annual interest rate of 8% in order to have $700,000 saved up on the first day of their retirement 45 years from today?

violetmuskrat25

Advanced Management Accounting Case:

In Early October, Priscilla Musso, general manager of theSpecialty Products Division (SPD) of Consolidated Furniture Corp.(CFC), was studying the division's third quarter financial reports.Sales were running significantly below plan, and it became quiteclear to Priscilla that SPD would need strong performance in thelast quarter of the year in order to reach its annual profittarget. Meeting budget was very important to Priscilla and hermanagement team because they were included in CFC's lucrativeexecutive bonus program, and they would lose all of their bonusopportunities if SPD did not achieve the profit targets.

To brainstorm for ideas, Priscilla called her management teamtogether. At first the managers on the team expressed onlydiscouragement. Everybody had been working hard, but the market wassoftening, and competitors were being very aggressive.

Then, after some delay with nobody else suggesting any options,Jonathan Robbins, SPDâs manager of sales and marketing, suggestedthat the division could implement a new sales program to pull somesales that might ordinarily be made net year into the current year.Any customers who accepted delivery in the fourth quarter would nothave to pay their invoice for six months. (Normally payment in theindustry were to be made within 30 days.)

Priscillaâs first reaction was favorable; this program might,indeed, achieve the desired result. But she asked the members ofher tea for their reactions.

Shirley Covey, manager of human resources noted that if thisprogram was successful, it would probably cause SPDâs employees tohave to work overtime at the end of the year, and that wassomething they traditionally did not want during the holidayseason. But Priscilla reminded Shirley that the employees would bepaid time-and-a-half for all the overtime hours that theyworked.

Priscilla asked Bill Bennett, SPDâs controller, if this programwould violate any accounting rules. Bill said there would be noproblem recording the sales as long as the items were shipped andbilled before December 31. The accounting would be consistent withGAAP. But Bill cautioned that this program was probably onlyproviding a short-term, cosmetic profit improvement. While it mightwell make the current year look better, it would probably causesignificantly lower sales to be recorded in the first quarter ofnext year. So next year the division would start in a deep hole.They would be scrambling all year to trying to dig themselves outof that hole, with no guarantees that they could pull it off. Itwas just postponing the problem. In addition, Bill reminded theteam that this program would be very expensive. On top of theovertime expense that would have to be incurred in the productionareas, the program would greatly increase SPDâs accountsreceivable. CFC was currently paying about 12% on its lines ofcredit, so this increase in working capital would be quiteexpensive for the corporation.

But Priscilla cut Bill short. She reminded him that CFC did notallocate interest expenses to SPD, so she was not particularlyconcerned about the corporationâs increased borrowing costs. Shewas more worried with her superiorsâ negative reactions if she didnot make this yearâs profit plan than she was about their reactionsto her allowing the receivablesâ balance to increase in the earlypart of the year. And while she acknowledged that they might becreating a problem for next year, she suggested it would be best toworry about that problem when, and if, it became real.

With no other options on the table to solve the current yearâsbudget problem, the SPD managers decided, unanimously, to implementwhat they called the âSales Acceleration Program.â

1. Identify the ethical dilemma--Identify and analyze primaryand secondary issues related to this ethical dilemma and impact onvarious stakeholders.

2. Analyze the ethical alternatives--Analyze alternativeresolutions to this ethical dilemma, the impact on variousstakeholders, and the reasons specific stakeholders prefer eachalternative.

3. Resolution of the ethical dilemma--Use an ethical frameworkto determine the most appropriate resolution of this ethicaldilemma. Use one of the ethical frameworks.

Mary and Harry Reser, 57 and 62, are looking ahead to retirement early next year. They are thinking about heading south to a cheaper and warmer state but haven't made a firm decision. Harry is the sole breadwinner and earns $64,543, plus an additional $8,169 from investments.

The Reser's two main concerns are longevity and taxes. "We want to take income from investments with the least amount of tax liability and make the money we have accrued last as long as we do," notes Harry. He also noted a concern about taking money out of tax-deferred plans in the correct manner to avoid IRS penalties.

The Reser's can be considered "millionaires next door," with an impressive net worth of $1,065,951. They have absolutely no debt and the following assets: $32,000 in a 2% bank passbook account, $347,365 in telephone stock; $224,901 in Harry's 401(k); $31,000 in an annuity; $202,685 in mutual funds; $23,000 in whole life insurance; their $190,000 home; and $15,000 of personal property.

No information was provided as to the type of mutual funds or the 401(k)'s asset allocation (i.e., the percentage of the account in different types of assets like stocks and bonds). Harry contributes 15% of his salary to the 401(k) and appears to have been doing this for many years. Neither spouse has an individual retirement account (IRA), however.

The Resers estimate that their monthly expenses total $1,500. The are concerned about the future cost of health care and note that, in retirement, "the biggest expense not in our current budget will be medical insurance." Currently, Harry shares part of the cost of health coverage with his employer but this coverage will end after he retires. His employer also provides short-term disability coverage and matches his 401(k) contribution up to the first 8% of pay.

The Reser's car and home have $500,000 and $300,000 of liability coverage, respectively. They do not own an umbrella liability policy. The Resers are thinking of tapping their $23,000 of life insurance cash value. "We do not feel that we need life insurance any longer," says Harry, "and will most likely cash them in."

Taxes were mentioned several times as a major concern. The Reser's taxable income is $50,543. If their adjusted gross income in retirement exceeds $44,000, 85% of their Social Security benefits will be taxed. Tax on Social Security is figured on what is known as "preliminary adjusted gross income." This figure includes all earnings, pensions, dividends and interest from investments, including tax-free municipal bonds, and half of a person's Social Security benefit.

The Resers do not have wills. They have no children and it is unclear who their heirs are.

1. Discuss the strengths and weaknesses of the Rese family's financial situation.

Their strength is their net worth of $1,065,951, their job contribute 8% of their 401k, they invest for the future and they have no debt.

Their weakness is that they can be penalize by the IRS, they have no kids so thereâs no will and they have no future health insurance.

2. Comments about Reser family's cash flow.

4. Calculate the savings required to reach Reser familyâs financial goals.

5. Recommend 3 to 5 action steps to improve Rese family's financial.

6. Recommended financial products such as bank accounts, insurance policies, and mutual funds for Reseâs family.

ADMS 4900 Lecture Notes - Lecture 8: Waste Management (Corporation), Pension, Stakeholder Theory

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