A company decides to remain highly leveraged to minimize the ownership shares. Critically analyze this approach
What will be an ideal response?
Answer: Companies that are highly leveraged (that is, carrying a lot of debt) are forced to devote more of their cash flow to debt service and therefore, can't spend that money on advertising, staffing, or product development. Heavy debt loads and low cash flow make a company especially vulnerable to economic downturns, too. In contrast, companies with lots of cash on hand can weather tough times and make strategic moves that their debt-constrained competitors can't make. Companies should strike a balance between leveraging and funding from internal sources.
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Price is the most visible cost of any purchase. List the seven types of non-price life-cycle costs. How can an understanding of these costs enable a business to charge a higher price than the competition?
What will be an ideal response?
The shipping problem in LP is also called the
A) production mix problem. B) freight train problem. C) transportation problem. D) land and sea problem. E) None of the above