Discuss the view that a firm like Campbell Builders, in which managers have a substantial ownership share,
Problem: Discuss the view that a firm like Campbell Builders, in which managers have a substantial ownership share, will always aim to maximise profits. You should make reference to the key concepts and theories of the firm encountered in the module, plus other background reading . Note that your answer should be in essay format and be no more than two sides or 1,000 words in length.
Problem: Use a decision tree to help advise CB on which of the three ( mutually-exclusive) options (1, 2 or 3) it should choose (if any). Assume a one-year time horizon for the decision, but consider also the possible longer-term consequences of the decision. You should also include in your answer:
- A clear statement of any assumptions you have made;
- Some form of sensitivity analysis ;
- An assessment of the relative riskiness of the three options;
- An indication of what additional pieces of information (both quantitative and qualitative) that you (and the company) would need to obtain in order to more effectively evaluate the three alternatives.
Deliverable: Word Document
