Understanding Business
11th Edition
ISBN: 9780078023163
Author: William G Nickels, James McHugh, Susan McHugh
Publisher: McGraw-Hill Education
expand_more
expand_more
format_list_bulleted
Question
Chapter 5.2, Problem 1MED
Summary Introduction
To determine: Consequences of the decision of whether bid should be accepted or not.
Case summary:
20 percent too low bid is received from a sub contractor. This loss could put the sub-contractor out of the business but it can also improve the chances to win the project of big shopping centre. The partners want to take the bid and let the sub-contractor suffer the loss.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
A CEO has placed you in charge of a new investment opportunity to borrow $5 billion dollars to create a new subsidiary of MCI called MillerCare Insurance.
Estimates indicate that in seven years, MillerCare Insurance and its assets will be valued at $8 billion. The best offer for the loan sits at 12 percent.
Mr. Miller instructed you to provide guidance to the new insurance firm, if indeed you decide to accept the loan package. How might you advise the top management of the insurance firm in regard to:
How the Law of Diminishing Returns impacts the insurance market
The dangers of
Moral hazard
Adverse selection
What is the cheapest source of funds? When all other sources turn down your request for funding, what source is most likely to say yes? Why is this the case? Is the entrepreneur exploiting a personal relationship with this potential source of capital? What are the consequences of using this source of capital if the business goes bankrupt?
You meet with an insurance agent to buy a life insurance policy covering your wife and naming yourself as the beneficiary. You complete an application and a questioner about your health and living habits and give $100 to the insurance company? Can you assume that you have a valid contract? Why or why not?
Chapter 5 Solutions
Understanding Business
Ch. 5.1 - Prob. 5.1AQCh. 5.1 - Prob. 5.1BQCh. 5.1 - Prob. 1TPCh. 5.1 - Prob. 2TPCh. 5.2 - Prob. 5.2AQCh. 5.2 - Prob. 1MEDCh. 5.2 - Prob. 3TPCh. 5.2 - Prob. 4TPCh. 5.3 - Prob. 5.3AQCh. 5.3 - Prob. 5.3BQ
Ch. 5.3 - Prob. 5TPCh. 5.3 - Prob. 6TPCh. 5.3 - Prob. 7TPCh. 5.3 - Prob. 8TPCh. 5.4 - Prob. 5.4AQCh. 5.5 - Prob. 5.5AQCh. 5.5 - Prob. 5.5BQCh. 5.5 - Prob. 5.5CQCh. 5.6 - Prob. 9TPCh. 5.6 - Prob. 10TPCh. 5.6 - Prob. 11TPCh. 5 - Prob. 1CTCh. 5 - Prob. 2CTCh. 5 - Prob. 3CTCh. 5 - Prob. 4CTCh. 5 - Prob. 1DWSCh. 5 - Prob. 2DWSCh. 5 - Prob. 3DWSCh. 5 - Prob. 4DWSCh. 5 - Prob. 5DWSCh. 5 - Prob. 1TITCh. 5 - Prob. 2TITCh. 5 - Prob. 1VCCh. 5 - Prob. 2VCCh. 5 - Prob. 3VC
Knowledge Booster
Similar questions
- You own a small company that developed software for organizing and playing music on mobile devices and computers. Your software contains a number of features that you have patented and the future looks bright. However, you have discovered something troubling. It appears that a number of the patented features were copied in similar software developed by Music 4 All, a huge software company with annual sales in excess of $1 billion. You are distressed. Music 4 All has appeared to have stolen your ideas. Worse yet, that company has the brand recognition and a marketing budget that far exceeds yours, which positions it to steal the market and possibly drive you out of business. You decide to sue Music 4 All for patent infringement. With attorney’s fees and other expenses, the cost of going to trial – win or lose – is expected to cost you $1 million. You and your attorney feel you have 60% chance of winning the case, which would award your $5 million in damages. If you lose the…arrow_forwardYour neighbor is a bit of a jerk, and he's known for cleverly deceiving people in his job as a salesperson. You have a yard sale where you sell a series of antique ceramics -- each one is labeled $25. Your neighbor walks over and offers you $20. You're not thrilled about it, but you accept. Two weeks later, you discover the ceramic is worth at least $5,000. You go back to your neighbor and offer to buy it back for the original $20. He says no and offers to sell it to you for $8,000. Can you sue your neighbor under the theory that the original contract (for $20 at the yard sale) was unfair, given the actual value of the item?arrow_forwardYou are a member of the legal department of a relatively new software firm, which is about to release its first product after two years of development. The software was developed for use by owners of rental property and is capable of doing all the necessary accounting, including the calculation of state and federal income taxes, associated with the property rental business. The software has an impressive array of features—many more, in fact, than its competitors—and is priced very competitively. You have been struggling to define the terms of the warranty that will accompany the software product. You want to keep the warranty simple to limit the firm's potential liability in the event it does not meet the expectations of customers. The head of software development, on the other hand, wants to create a warranty that will stand out as far superior to the competition in that it spells out the specifics of what the software will and will not do. What are the pros and cons of each approach?arrow_forward
- In the car insurance market, how can a company convince the unisured to take up insurance?arrow_forwardSuppose you had inside information that your employer was thinking about declaring bankruptcy, and you find out that a family member was about to purchase $20,000 in the stock of your employer. To what extent would it be unethical for you to dissuade the family member from making the investment?arrow_forwardSome restaurants offer a 10% discount on the payment of bills in cash because they do not have to pay the tax then. Assuming both customers and restaurants are comfortable with such a situation. Do such practices should be permitted or restricted? Explain the reasons and perform an ethical analysis of such situations using at least 2 workable ethical theories. Indicate at least one ethical theory that makes this situation ethical for both parties.arrow_forward
- Imagine this scenario in which you work at a dental office and the office manager is a close friend of yours. Unfortunately, the dental office is operating in a depressed economy. You recently discovered that your friend, the office manager, is committing insurance fraud to make ends meet and to keep the dental office open. What are your professional and ethical obligations in this situation? How should you deal with the situation?arrow_forwardIn class we discussed the "Assumption of Risk' doctrine. It can be argued that this doctrine promotes economic efficiency because it requires businesses to assume the risk of operating it allows people to engage in activities that would otherwise be too risky for businesses to offer O it assumes that the marginal benefit of the risk is equal to the marginal cost of the risk it requires businesses to assume the cost of injuriesarrow_forwardOne of the disadvantages of owning a corporation is that Multiple Choice O you will likely experience personality conflicts or other disagreements among partners. you must publicly disclose financial information. you will need discipline, putting the company's needs before your own desires. may have limited financial resources and few fringe benefits. creditors will not be able to hold you personally responsible for the corporation's debts.arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- Practical Management ScienceOperations ManagementISBN:9781337406659Author:WINSTON, Wayne L.Publisher:Cengage,
Practical Management Science
Operations Management
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:Cengage,