Question
Identify the losses after reading the below description: It is worth noting that a business success solely depends on the ability it has to continually
Identify the losses after reading the below description:
It is worth noting that a business’ success solely depends on the ability it has to continually earn profits. Increased profits would greatly benefit Delphi because the company can use it to expand its operations. Expansion is facilitated by the management which has the ability to undertake additional responsibilities, including taking Ford as a new customer. Accepting the offer of $5.9 million from Ford would attract new investors to Delphi. The more customers a company has, the greater the chances it has of attracting investors. Hence, it would be a good course for Ford to be Delphi’s customer, so as to bring in private investors who would fund the business for other business operations. Investors are attracted by a company’s ability to earn an attractive return on their investment, and this is characterized by the number of customers a company has. Hence, Delphi should accept the offer because of the benefits it would get.
$5.9 million would be a favorable number for Delphi as the profit margin that would be realized with such a figure would be incredible. The automaker company has, for a long period, lacked business, so this would put the company right on track to realize the goals that were projected for the end of this year. The lowest bid that was on the table was $6 million; therefore, passing on this offer would be greedy of Ford since there was no better deal. However, Delphi had different designs that were already put in place and materials to manufacture a steering column for a vehicle, which allowed Ford, make an offer that was favorable to both companies. Seeing as Delphi is already prepared to manufacture the steering columns, the offer of $5.9 million is favorable and should be accepted.
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