Question

Response must be 300 words each

Scenario You are working as a graduate within the engineering department of a manufacturing and consulting focused public listed company. You and your team are working on the post-COVID recovery and how best to allocate capital. Your team has $1,000,000 in capital at their disposal. The entire department is going to have a conference call next week and you have been asked to prepare a memo for the team regarding the financial options being considered. As the accounting department will be joining your memo is to prepare the staff for the call. The accountants are expected to use terms which may not be fully understood by the greater department. So your memo will be distributed before the call or you may be asked to speak on the call to assist everyone's understanding. The memo should discuss:

1. As there is still uncertainty about employees returning to work the capital may need to be moved from its current interest bearing account elsewhere. Explain the opportunity cost associated with leaving the money in a bank account as opposed to other investment options that may mitigate that opportunity cost.

Answer 1

So we have $1,000,000 in capital

There are 2 options fro the above one is continuing the business with the capital and second is investment options( i.e investing some where else.

1. We should continue with the business , as in future we should think of continuing the process of making the money,as now lockdown has been removed and run the business with minimum employees.

2. For most of the days if there is no publicity of any business or not running for few days , most of the people will shift to other buyer or service provider. As they have many options , we know there is lot of compitetors in the market.

3. If we invest in some other place, we get less return., it is also mentioned that employees is not in a stage to returning the work, we can take appropriate measure like sanitzing and mask. we can assure them and get back to work

4. As many of them is afraid of layoff and many people have lost their job, lot of them are ready for working. lets use some of the amount for advertising for jobs and for safety measure its better to open the busineess and run it