Chris has just been hired as the new CEO of Bridge-It Energy Soluons, a 40-year-old corporaon specializing in installing oil and gas pipelines throughout western Canada. The company made a sudden transion in its leadership last week aer the previous CEO, Jack Burns, was recorded drunk in a local bar making derogatory comments about Terraces indigenous community. The clip went viral and the company acted quickly to announce that Jacks comments did not reflect the views of the organizaon and relieved the 67-year-old execuve from the dues he had held for eighteen years. To replace Jack, Bridge-It hired Chris, who had been working as the VP of Communicaons with a compeng pipeline company. As he comes from an indigenous background (his grandmother was one-quarter Kitsela), Chris has an idea of what needs to be done to work equitably with the indigenous BC community. He already has some experience in this area with his old role. Over the last couple of years, Bridge-It's customers have urged the company to mend its relaons with the indigenous community. However, the shareholders have relentlessly urged the company to connue focusing only on generang the highest profit possible. Lisa, one of Bridge-Its senior accountants has noced the company has recently lost bidding wars on a couple of new projects. One of the concerns from customers has been its lacking community relaons. In her first discussion with Chris, Lisa wondered if discussing the issue with the media and shareholders may help push the company in the right direcon. Chris convinced her to keep quiet for now, reminding her that certain informaon should remain inside the company unl it can be disclosed strategically. Chris wants an outline of the ethical implicaons of the companys current business environment, including potenal polluon concerns and accountants who have access to sensive informaon. He also wants specific advice on how the company can become more ethical (once again, taking into account specific polluon concerns with pipeline companies). A golf course in Terrace, which has agreed to let the oil pipeline through its property in exchange for $250,000 and assurance that Bridge-It will only complete work between October and March, has inquired about having addional natural gas lines installed so there can be outdoor paos with fireplaces around the golf course. Chris is wondering how he would price out a job like that and how the bookkeeping/accounng process for it might look like. While there are employees with experience with this sort of thing in the company, Chris has been explicitly told by major investors to invesgate cash shorall issues which have plagued the corporaon of late. Hence, he will try to get external help with pricing new projects to avoid unwingly involving someone who has been cheang the company. Chris is planning on conducng a thorough invesgaon to determine the cause(s) of the cash shoralls. To start, he wants to make a budget of a project started last year, Eagle Heights. He has some data about the construcon process to date, but highly suspects it is incomplete (he feels not all relevant costs are included). He wants you to not only look at the data crically, ensuring nothing is missing, but also explain to him why budgeng is a useful process. He isnt sure why the company hasnt been budgeng its projects in detail all along and is considering making regular budgeng a strict policy at Bridge-It. Here is the data he has for the Eagle Heights project: Inputs Required Cost per input 20-foot pipeline segments (433) $814 per segment Digging/prep man hours per segment (2.7) $32 per hour Digging/prep machine hours per segment (2.4) $122 per hour Installaon- man hours per segment (3.2) $47 per hour Installaon- machine hours per segment (2.8) $113 per hour Installaon- supervisor hours per segment (1.1) $68 per hour End-of-project land restoraon cost $235,000 Bridge-It narrowly won the Eagle Heights project with a bid of $1.18 million three years ago. Since then, the project has suffered repeated delays. A significant poron of the costs incurred to date have been covered via bank loan- the Eagle Heights customer has paid $250,000 in advance. Currently, the company has installed 303 pipeline segments (all of the segments have been purchased) and spent a collecve $696,000. Chris is wondering if the bid for such a large project was too low. He wants advice on how to evaluate budgets once actual data is available. He is also wondering if the company should bid higher in the future. In his mind, a project is not worth doing unless there is a profit margin of 25% aer all expenses, but hes not sure if this is the right mentality to have. Bridge-Its management has been thinking about invesng in a new $550,000 machine which would be able to dig as well as install pipeline segments. This would drop the digging/prep hours to 2.1 and the installaon machine hours to 2.6 (Eagle Heights is a typical project for Bridge-It, so the projects numbers are prety representave of the company as a whole). Also, the man hours for both funcons would drop by 10%. The machine could feasibly be used for 1,500 hours a year for the next eight years, at which point it could be scrapped for $5,000. An alternate opon is for the company to lease the machine for four years, at a cost of $6,000 per month. With leasing, the esmated maintenance costs of $3,500 per year would be covered by the machines owner. Currently, Bridge-It is able to borrow money at a rate of 4.20%. It can also opt to issue addional common shares instead (the company has paid an annual dividend of $3 per share for the last decade). Some shareholders have expressed concern over the company borrowing more money, as debt is already 90% of equity. However, other shareholders are not keen about the company issuing new common shares. In addion to a financial analysis of buying, leasing, or forgoing the new machine, Chris wants a detailed discussion of pros and cons of financing with debt or equity (parcularly with Bridge-It). Bridge-It is also strongly considering boosng its annual markeng budget from $80,000 to $130,000. By doing this, it could bid 10% higher on projects but sll connue to sustain its current revenue level of $1,400,000 a year. Chris wonders if there is any real advantage to doing less business for the same money. He wants you to think about what kind of adversing might be appropriate to atract large businesses such as golf courses, hotels, and even municipal governments. He also wants to use strategic markeng to rapidly improve Bridge-Its reputaon, specifically with indigenous issues. Chris is well aware that he does not have enough experience with accounng, finance, or numbers in general to make decisions unilaterally for Bridge-It Energy Soluons- he really is in a tough spot unl he resolves the cash shorall issue and starts trusng others in the company. He is asking you, a group of talented MBAs, for a detailed business report which outlines the companys current situaon, analyzes the issues it faces, and provides praccal recommendaons. Please provide good understanding of company's current situation, issues and practical recommendation for this