- Each of the first three questions are only assigned 5% of this assignment’s total points. These answers will be relatively shorter than the questions assigned more points.
- The answers to each of the first three questions should be about one page.
- The answers to each of the five remaining questions should be about two pages each.
- This assignment is only a small part of a business plan. Only answer the listed questions.
- Be sure to follow the paper guidelines posted earlier in this course.
I have slightly modified three questions to hopefully reduce the time taken to complete this assignment. These suggestions may or may not be taken.
I have changed the goal from maximizing revenue to maximizing net income from operations.
Question #2. Do not include any ratio formulas to discuss any specific ratio in this answer. Discuss how ratios might be used in the decision process by both direct stakeholders (investors, lenders and employees) and indirect stakeholders such as suppliers. Briefly discuss some limitations of using a ratio.
Question #3. Do not define the calculations of IRR and NPV. Durango will only use these methods to evaluate the acceptability or rejection of capital projects. Some possible projects do not rely on whether another project is accepted or rejected. These project decisions are considered independent of each other. Will the use of both the IRR and NPV methods lead to the same accept or reject decisions?
What if unforeseen problems or opportunities arise, what options may Durango have? Under what conditions should Durango scale back or expand the project?
Question #5. What costs should be considered in the decision whether to outsource? Should opportunity costs be even considered in the outsourcing decision? What if Durango is operating at full capacity, should this be a factor in the outsourcing decision?
Questions #6 and #7. I may not have read our text very carefully but I could not locate any part of our required readings that would help answering these questions. These questions may require some research.
Question #8. Would SOX and a Code of Ethics influence the organization structure of Durango to reduce the potential for fraud?