Research And Development Of Silver Cloud Computing

1403 Words6 Pages
As a member of the board of directors at Silver Cloud Computing I have thoroughly analyzed the revised projected income statement currently presented by the CEO. As a new and thriving company I feel as though it is of the upmost importance that we remain ethical in all areas while making the best decisions for our company, employees and shareholders. With that being said, after considering the proposals I have some concerns that I feel must be addressed. The first issue that was a red flag to me is the slash of the research and development expenditures from 12 million dollars to 5 million dollars. This is a dramatic reduction of funds that comes with multiple ramifications. Research and development is one of the means by which our company…show more content…
Not only could this allow for Silver Cloud Computing to fall behind competitors but it will also put jobs in the research department at stake and decrease many salaries. It is extremely important to keep the wellbeing of our employees and the research department in mind. This is an ethical and financial dilemma that I feel we must compromise on. This particular reduction creates a conflict of interest between employees, the future of the company, shareholders and the CEO. I believe that it is in our best interest to reevaluate the numbers to establish more realistic research and development goals to continue growth and stay competitive. There are surely areas in our research and development process where funding can be reduced however negating over half of the budget is risky. Once the budget is established, investors need to be able to measure the productivity of the research and development expenditures. It would be excellent for Silver Cloud Computing to introduce a research and development profit metric that gauges the effectiveness of research spending. This is an admirable way to maintain transparency with consumers by showing them that we are profiting from our spending and remaining competitive within the industry. The next major issue I wish to address is the proposed decrease in depreciation expense. In the projected income statement, depreciations are reduced down from $50,000 to $25,000 by increasing
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