(a)

A business decision to supply goods to an additional customer utilising spare capacity should price the product AT LEAST greater than the incremental costs of meeting such an order. Describe the rationale of meeting such an order , and 2 potential adverse consequences of selling at a lower price. Assuming the business decides not to supply the customer provide two alternative strategies the company can implement to improve longer term profitability.

(b)

A business' social and environmental responsibilities place an enormous burden on longer term profitability. If so are businessess simply better off to ignore such responsibilities and focus on longer term shareholder value. Can you identify potential costs in such a strategy?

(c)

Organizations providing credit to a company structure, such as suppliers selling goods on credit and banks loaning money, take on greater risk due to limited liability of stakeholders. Describe the concept of limited liability and discuss three legal safeguards that assist such third parties to minimize their potential risk of not being repaid amounts owing.