1-) Cor Finance(awais)
Cost of Buying Chains per year = $2 * 300,000 = $600,000
Cost of Buying Chains for 10 years = $600,000 * 10 = $6,000,000
Cost of Manufacturing for 10 years = $250,000 + $50,000 + $4,500,000 + $20,000 = $4,820,000
Difference = $6,000,000 – $4,820,000 = $1,180,000
Based on the calculations above, the manufacturer should invest in the project and start manufacturing the chains in-house. Doing so will save the manufacturer $1,180,000 in 10 years as opposed to buying from outside.
Additionally, the payback period of such investment would be;
Initial investment/saving per year = $300,000/$150,000 = 2 years
In-house manufacturing of chains would be challenging at first. It would require a designated area, more labor, more utilities, efforts to initiate and regulate the whole project, etc. On the other hand, the company will be saving more money. If the company increases production to a higher level, it can start selling the chains to others for the market rate which will be quite profitable for the firm. Doing so also makes the company more self-sufficient in its production.
I would recommend that the manufacturer should invest in the project as it opens more prospects for the company’s future. It also saves the company money, which can be used to reinvest in the business for business expansion.
Popularity can help businesses grow. Companies spend large amounts of money on marketing to gain attention and popularity. It has become a common practice for companies to use the popularity of celebrities like models, actors, sportsmen, singers, etc. to market their brand. Studies show that doing so can increase sales and improve the brand’s image quite significantly. This is the reason why companies are willing to pay huge amounts of money to different celebrities for their endorsements. For example, Jordan and Nike have been collaborators since 1984, when a youthful Michael Jordan inked a contract with the company. Jordan would receive roughly $2.5 million from the deal, which was a significant sum given that he had yet to prove himself on the big stage. Famous soccer player Messi has also appeared in commercials for Pepsi, Gillette, and Turkish Airlines. Forbes estimated his endorsements at $35 million for the year in their 2019 celebrity rich list. Similarly, Leonardo DiCaprio who has been the world’s highest-paid actor is the ambassador for luxury watch brand Tag Heuer. The actor makes millions of dollars through this endorsement. He is also known to charge $5 million dollars to appear on TV for advertisements.
Berk, J., DeMarzo, P., & Harford, J. (2021). Fundamentals of Corporate Finance. 5th Edition. New York: Pearson.
What is Lionel Messi’s net worth and how much does the Barcelona legend & PSG star earn? Goal.com. (2022). Goal.Com. https://www.goal.com/en-us/news/lionel-messi-net-worth-salary-contract-sponsors-charity/oo0qu9cail971no5jkcii7x3h
2-) (management theory) (precious)
Chapter 10 emphasizes on Leading positive change which is a management skill that focuses on unlocking positive human potential. Positive change enables individuals to experience appreciation, positive energy, vitality, and meaningfulness in their work. It focuses on creating abundance and human well-being. It fosters positive deviance. It acknowledges that positive change engages the heart as well as the mind. The following are the behavioral guidelines for achieving positive change:
1. Establish a climate of positivity by creating positive energy networks; ensure a climate of compassion, forgiveness, and gratitude; and identify and give feedback to people on their strengths and unique competencies.
2. Create readiness in others to pursue positive change by benchmarking best practice, and comparing current performance to the highest standards; institute symbolic events to signal positive change; and create a new language that illustrates the positive change.
3. Generate commitment to the vision by applying principles of recreational work associated with the vision; provide opportunities for people to publicly commit to the vision; and institute a strategy of small wins.
From my experience so far on this course, I have been able to improve my level of self awareness and communication skills in order to become a distinctive leader. Effective communication has helped me understand emotions and intentions behind any information or given tasks.
Whetten, D., Cameron, K.(2016). Developing Management Skills. 9th Edition. New York: Pearson.
(Please respond to 2 different discussions and make a prompt comments each answer has to be 100 words)