Question
4. Larrys sister, Sherry, has just started up a new construction company that specializes in the construction of commercial buildings. Larry is extremely eager to
4. Larrys sister, Sherry, has just started up a new construction company that specializes in the construction of commercial buildings. Larry is extremely eager to see his sisters company get off the ground and become successful. Two years ago, Sherrys husband, Pete, was severely injured during combat while serving with the United States Army. Pete is totally and permanently disabled as a result of his injuries. Since Petes injury, Sherry has become very involved with the Wounded Warrior Project, serving as Chairman for the charitable organizations local chapter. She is also involved with several other charities in the area that provide food and other necessities to the homeless. Sherry has pledged to donate 10% of the net profits from her construction business to charity. Larry knows that a $4,000,000 construction project could be life-changing for Sherrys new company, Sherrys family, and countless individuals impacted by the charitable organizations Sherry is involved with. Larry could easily (and discreetly) increase the estimated future annual net cash flows for Ace Manufacturing by a small amount (approximately $15,000 per year), thereby changing the results of the calculations supporting a different recommendation to the companys board of directors. Explain why Larry should or should not consider doing this.
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