Chapter 7, Problem 6QAP

David H. Brooks, a university graduate with an accounting degree and the former CEO of DHBIndustries, Inc., was charged in October 2007 with accounting and securities fraud for failing toreport the company’s inventory at the lower of cost or market. From 2001 to 2005, DHB purchasedlarge quantities of a material called Zylon and used it in making bulletproof vests that were sold tothe U.S. military and local law enforcement agencies. During this same period, DHB learned thatZylon deteriorated rapidly when exposed to light, heat, and body perspiration. DHB knew that oneof its competitors, Second Chance Body Armor, had stopped using Zylon in its vests and, eventually, discontinued its business because customer demand for its Zylon-based vests had evaporated.DHB did not write down its own inventory of Zylon and Zylon-based vests because it had a largecontract to supply the U.S. military with bulletproof vests. In its financial statements for the yearended December 31, 2004, DHB reported…

ABC Corporation is the sole_providerof a particular service.in-the country.The government has-opened themarket for another competitorthrough an anti-monopoly law. Whatshould ABC-do?  A. Assess how this would affect the business and determine whether it can improve production processes, lower costs, and improve its service.B. Purchase all available raw materials and prevent the competitor from having smooth operations.C. Identify its rights in the constitution to prevent the new competitor to exist.D. Reduce negative environmental and community impact through corporate social responsibility and persuade the government to not implement the law.

Magna Steel Erectors, a Canadian manufacturer and exporter of steel components in bridge building has negotiated a deal with BridgeCon Inc., an American bridge construction firm. They have been doing business for several years and have used both Open Account and Letters of Credit. Recently BridgeCon has experienced some challenges in paying on time and maintaining its creditworthiness. Rumours are rampant about the potential for BridgeCon to encounter severe financial difficulty. As a result, Magna is worried about being paid for future shipments. In addition, Magna has recently lost several key engineers and project managers which has severely impacted their ability to perform key work and complete some recent projects on time and to the satisfaction of previous customers. Name and describe two types of Standby Letters of Credit that could address the concerns that Magna has about BridgeCon or that BridgeCon might have about Magna

Enron's directors realized that Enron's conflict of interests policy would be violated by Fastow's proposed SPE management and operating arrangements and they instructed the CEO, Andrew Fastow, as an alternative oversight measure, endure that he kept the company out of trouble.  What was wrong with their alternatives?

Delta Telephone ltd. ,a subsidiary of a multinational  company is a supplier of telephone services to a medium sized community in Ghana. John Dela , the chief executive of the company has just attended a trade exhibition entitled ‘Automated Emigrate’ in Japan. As a result of what he learned  from  the exhibition  and information he has picked from  his peers in other companies , Mr Dela  is concerned about  Delta’s ability  to maintain its competitiveness position in the telecommunication market in Ghana. Owing to deregulation in the telecommunication industry and the aggressive action of new competitors in the local area, a significant number of Delta’s customers have switched to other suppliers of telephone and related telecommunication services. Mr Dela feels that if Delta were to invest fully in new state- of –the- art  fiber-optics  technology as well as upgrade in the   latest computer equipment , the loss of market share may be arrested  and operating efficiency may be improved…