Your company’s new owners suggest the following changes to maximize the value of the firm. Write a brief report responding to each point in turn:

(a) Add a cost of living adjustment to the pensions of your retired employees.

(b) It is expected that high oil prices will increase your revenues by 25 per cent. The company wishes to increase its exploration costs by 15 per cent and pay the rest of the profit out to shareholders (i.e. themselves) in the form of increased cash dividends.

(c) Begin new research and development into more advanced but untried exploration techniques.

(d) Lay off 15 per cent of the workforce to keep costs down.