16 Alec Smart, a first-year varsity social work student, and Lee Brier, a first-year business studies student,
Question:
16 Alec Smart, a first-year varsity social work student, and Lee Brier, a first-year business studies student, are debating the merits to society of business investment. Alec presents the following argument:
Business investment in plant and equipment only benefits the capitalist élite in our society. If a business prospers, then the wealthy shareholders prosper. The business managers who have increased their shareholders’ wealth also gain, as they receive extravagant salaries and fringe benefits as their reward. As always, the rich get richer and the poor get poorer.
Lee understands the point Alec is making, but she feels that the issues are not quite as black and white as Alec is portraying. What points could Lee raise to demonstrate to Alec that benefits from business investment accrue not only to shareholders and managers but also to society as a whole?
Step by Step Answer:
Fundamentals Of Finance
ISBN: 9780994132529
4th Edition
Authors: Andrea Bennett, Jenny Parry, Carolyn Wirth