Please see the question attached.
Ocean and Salvage Recovery Inc. was established in 2008. The company specializes in salvage, towage, wreck removal, and offshore installation support operations (anchor handling/supply) for the shipping industry as well as for the oil and gas industries worldwide. The company provides advanced proposals for its services prior to committing to the services. For 2014, the company is considering a proposal for a wreck removal. Here is an estimate of the revenues and costs for this removal. Ocean and Salvage Recovery Inc. Maritime Wreck Removal Proposal Revenue and Expenses Forecast for 2014 (in thousands) Revenue Expenses Direct wreck removal salaries1 Removal coordinators' contracts Survey costs2 External quality control contracts Administration and equipment insurance3 Group accident and life insurance4 Depreciation Removal support employees1 Equipment maintenance5 Direct site meals Hotel and accommodation costs Administrative and head office expense6 Total expenses Net operating loss $ 170,000 48,000 30,000 12,000 8,000 2,000 7,000 8,000 28,000 7,000 20,000 20,000 3,000 193,000 $ 23,000 Notes: 1. Ocean and Salvage Recovery Inc. will incur a cost of 5% of the salaries in severance costs when employees are terminated. This cost will have to be paid if the removal proposal is not accepted. 2. Survey costs have already been incurred. 3. Administration and equipment insurance is an apportioned amount of the total annual costs paid by the company. 4. Insurance is payable only if the removal is confirmed. 5. Equipment maintenance costs are specific to this job. 6. These expenses are for related removal accommodations, arranging meals, and providing communication services during the removal. Required a. Based on the costs provided determine whether the wreck removal proposal should be accepted. (4 marks) b. Calculate the minimum revenue required to justify accepting the wreck removal project. (3 marks) c. Corporations and their managers are expected to act ethically. This is part of corporate social responsibility. However there are two contrasting views of what this responsibility involves. i. Contrast the stockholder and stakeholder views. (2 marks) ii. Under what conditions would each view recommend that a company meet environmental targets beyond the letter of the law? (2 marks) iii. Using the stakeholder view of corporate social responsibility, list two stakeholders in this wreck removal project. For each stakeholder, determine what qualitative factor the company should consider when deciding whether to take on the project. (2 marks)
