Financial Management

Answer no.1

All business entities from small firms to the largest global corporations' profitability and its future existence depend on the acquisition of judicious, capital assets' disposal and maintenance. Decision makers must address the financial goals of the firm and other non-financial issues which are associated with its environment when considering a potential acquisition of capital asset. To determine the expected monetary value of an asset, financial analysis techniques are used such as discounted cash flow and the present value. There are also essential roles of industry regulations and the government rules which are implemented, a company must be proactive and consider that how the community and its relationship with employees, suppliers and customers will be affected through these roles. When the capital acquisition is financially acceptable by its demonstration, the firms is allowed to enter in the decision making phase in which the appropriate way is selected for structuring the acquisition as a transaction. As a result, the context of this planning decision is shaped due to the whole set of financial and non-financial factors. Also, the risk and uncertainty elements play a vital role in complicating the expectations of future (Wallingford, 2002).

In the domain of accounting, the problem solving technique is adopted which is known as the hierarchical classification. It is mainly used for selecting the plan of capital asset acquisition which highlights the plan selection problems for understanding in the domain. It enables the solution of financial problems from the level of the task which is being performed and clarified the nature of the main issues which are involved with problem solving.

Answer no.2

(Mitchell, 2007)This is the famous saying in the Popeye comic strip and it is headed very fast into the fast food chains due to which some of the customers are persuaded to purchase prepaid “gift cards”. It means that customers can eat hamburgers today but the payment of that burger will be paid on Tuesday or may be never at all.

But it was an unattractive offer for the Burger King. The reason is that they have no money to pay for installing card readers and issuing a prepaid card as a gift card for their customers. Furthermore, they were getting more involved into debt and promising to pay back at a later date. There would be bankruptcy in the Burger King if they allowed this type of promise to their customers and was not ready to compete in the market due to lack of resources and debt management. Firstly they have to pay off their outstanding balance of their customers. (Mitchell, 2007).

Now today, these cards are widely used in the fast food chains. Even the Arch Card of McDonald is the most profitable new technology of the company. Recently in few years, many of fast food restaurants have started to accept debit and credit transactions and installed card readers. (Mitchell, 2007)As a result, the deals have been sweetening because of prepaid cards. The restaurant gets the money from the customer and provides them a fashionable ...