Alberto runs a small but very successful coffee shop inside a busy mall in Peterborough. His wife and he run this coffee shop 7 days a week from 11 am to 8 pm. Other shop owners at the mall love their coffee and have become loyal customers of their business. Sonia, who runs a chain of flower shops in several malls, including theirs, have approached them with an idea to expand their business to other malls in the area. She claims to have a lot of connections with financial intermediaries who may be able to help fund the expansion. In fact, she promises to share with Alberto, the financial information and business proposal prepared by one of her competitors who successfully applied for a loan few months ago. According to her, she is best friends with Caroline who is working for a local bank as a manager and can help them get the required amount even without any documentation. She is asking for a promise to pay 5% of the loan amount to her as “fees” for her services.

Alberto runs a small but very successful coffee shop inside a busy mall in Peterborough. His wife and he run this coffee shop 7 days a week from 11 am to 8 pm. Other shop owners at the mall love their coffee and have become loyal customers of their business. Sonia, who runs a chain of flower shops in several malls, including theirs, have approached them with an idea to expand their business to other malls in the area. She claims to have a lot of connections with financial intermediaries who may be able to help fund the expansion. In fact, she promises to share with Alberto, the financial information and business proposal prepared by one of her competitors who successfully applied for a loan few months ago. According to her, she is best friends with Caroline who is working for a local bank as a manager and can help them get the required amount even without any documentation. She is asking for a promise to pay 5% of the loan amount to her as “fees” for her services.

Practical Management Science

6th Edition

ISBN:9781337406659

Author:WINSTON, Wayne L.

Publisher:WINSTON, Wayne L.

Chapter11: Simulation Models

Section11.3: Financial Models

Problem 23P: Suppose you currently have a portfolio of three stocks, A, B, and C. You own 500 shares of A, 300 of...

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