University of Phoenix
MBA 540/ Tim Randolph
January 8, 2006
Wealth Maximization Concepts Worksheet
Concept Application of Concept in the Scenario Reference to Concept in Reading
As Businesses go about the task of raising large amounts of money, taking on other forms is normal. "The firm is a way of organizing the economic activity of many individuals, and there are many reasons why so much economic activity is carried out by firms and not by individuals. The theory of firms, however, does not tell us much about why most large firms are corporations rather than any of the other legal forms that firms can assume", (Ross-Westerfield-Jaffe, 2004). In the case of Lester Electronics, Inc. (LEI), the company started out in the 1920's as a small family business owned by Bernard Sr. The business was sold in the 1970's due to encroaching overseas manufacturers. In 1978, the business was acquired by Bernard Jr. and again become a sole proprietorship.
Currently, the company is faced with a decision that will change the legal form of LEI. Either, LEI will establish a partnership with Shang-Wa Electronics or become a corporation by acquiring Shang-Wa.
"The Corporate firm is a way of organizing the economic activity of many individuals. There are three basic legal forms of organizing firms; sole proprietorship, partnership and corporation. The task of raising large amounts of money is the main purpose under each form," (Ross-Westerfield-Jaffe: Corporate Finance, 7th Ed.,).
The balance sheet is an accountant's snapshot of the firm's accounting value on a particular date.
The Larry Parker Business Center at Grace Hill (GH) provides seminars for business development to at-risk or underserved women in the neighboring communities of Saint Louis, Missouri. One of the key factors of the seminar is the remove the fear of reading and analyzing a balance sheet. "The balance sheet has two sides:... [continues]
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