Assignment 3: Long-Term Investment Decisions Due Week 9 and worth 300 points Ass
ID: 3253780 • Letter: A
Question
Assignment 3: Long-Term Investment Decisions Due Week 9 and worth 300 points Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients. Use the Internet and Strayer databases to research government policies and regulation. Write a six to eight (6-8) page paper in which you: Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response. Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.
Explanation / Answer
Solution:
Dear Student please post one question at a time:
Question 1: Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products response to a change in price less elastic. Provide a rationale for your response.
Answer: A low calorie or sound choice nourishment is a new idea which has picked up a ton of enthusiasm for now's circumstances. Eateries, schools, and even penitentiaries are bolstering more advantageous. More individuals need to be sound and live more advantageous ways of life. To layout an arrangement at chiefs expecting increasing costs, looking at the significant impacts the legislature have on generation and work, decide if government directions guarantee decency, inspect the real complexities under extension by means of capital ventures, and in conclusion propose how an organization could make merging between the interests of investors and administrators.
The Company expects to keep the costs of its items as inelastic as would be prudent. This implies the estimating technique ought to have no effect in transit the buyers see and purchase such items . For the most part we see such request just in circumstances in which the great or administrations are vital and the shoppers can't manage without the item. This is not the situation for microwavable nourishment items. The request work for low calorie microwavable sustenances to a great extent relies on upon the cost of the stock, its relative (substitute) item, promotion overheads and last however not the slightest on the pay of the customer.
From the request work and the flexibility thought of it as, is set up that the market for the low calorie microwavable sustenances fit into a market of monopolistically aggressive sort. A monopolistic focused is recognized by a sensible number of purchasers and dealers. Accordingly individuals can change to another brand if a particular brand charges a taking off cost. Be that as it may, monopolistic aggressive providers do item separation and thus getting the purchasers.
Presently, Profit (NP) = Total Revenue (TR) Total Cost (TC)
= PQ TC
As indicated by the FOC of benefit augmentation, we get
=-[Here P is not fixed]
so MR = MC
From the flexibility as considered in the predetermined assignments, we can watch that the interest for the low calorie microwavable made merchandise is not exceptionally versatile in nature. Presently, with the reason to keep up their items as inelastic as practical, the firm will endeavor to separate its stock from different results of different firms. On the off chance that their item is disparate from others then the clients won't find a substitute for that stock clearly. This will define the interest for the equivqlwnt item inelastic in character,
we know this reality tat the bigger the measure of item differentation the bigger the market control moves toward becoming. Subsequently, it is sensible for the association to do overwhelming item separation to benefit as much as possible from its benefits.