The Kardell Paper Co.

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trbetrovyy1

Business Finance

Description

Using the Modified 5-Question Approach, analyze the ethicality of the decision to (or not to) incorporate the new technology and make a fully supported recommendation to the Board of Directors. Supplement this analysis with a Cost-Benefit Analysis (CBA) table.



You will need to reference your CBA in your recommendation to the Board. Make sure you thoroughly detail your recommendation with reflections on the consequences of the decision, whether the decision is fair to all, and whether the decision demonstrates the virtues expected of the Board of Directors, taking relevant codes of conduct into consideration, and the company as a whole in terms of social responsibility.



The following information and assumptions should be used to complete the Cost-Benefit Analysis:



Annual Revenues from the mill average 625 million.
Profit margin from the mill is approximately 11%.
Implementing the new technology would take two full years. The first year, the company would operate at 65% capacity (assume the company could maintain the 11% profit margin during reduced operations). During the second year, it would need to be completely shut down. After the two year period, the mill could reopen and operate at pre-implementation levels.
Approximate cost of litigation including medical costs for all affected by the contamination, environmental sanctions, legal and court costs, victims’ pain & suffering, and several other items is 1.7 billion. Estimate present value of future costs at 20%.
The company would spend approximately 4 million in hiring, onboarding, and training new employees after reopening as a result of several of their existing employees having to seek employment elsewhere during the shutdown.
As a result of the layoffs and shut down, the local economy would suffer greatly. The community would be forced to implement a 3 year tax on all local business profits of 5%. The tax would be enforced for 3 years beginning after the reopening of the mill. (Assume pre-implementation profit margins when calculating this and exclude all other costs and taxes when preparing this analysis.
Your recommendation should be addressed to the Board of Directors. It should be 4-6 pages long (including the CBA and a reference page). Your paper should be APA compliant.

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Cost-Benefit Analysis Benefit/Savings Present Value (at 20%) of Possible Litigation Cost to Implement New Technology Decrease in Profit during Year 1 Decrease in Profit during Year 2 Actual cost of new technology Onboarding/Training new employees Additional Local Taxes Net Benefit 20% likely 50% likely 75% likely
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Running head: THE KARDELL PAPER CO.
Topic: The Kardell Paper Co.
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The Kardell Paper Co.

2

Kadell Paper mill began its operations near the Cherokee River by the Kardell family
based in the Southeastern Ontario. The company continued expanding and by 1985, the
company’s revenue had surpassed $1.7 billion annually. The paper mill company serves a
population of at least 22000 based in Riverside and its vicinity. The Riverside community
entirely relies on the mill because it employs at least 500 people directly, and others indirectly as
suppliers and other positions. The company, however, had no environmental considerations
when developing the company, with the waste discharged into Cherokee River operating within
the provincial requirements.
Fredrick, (2017) argued that the then assistant manager in charge of production manager
proposed the need staying within the latest technology of the industry. The firm engaged a test in
its end-use industrial discharge and found another chemical called sonox. Kardell considered
performing an environmental audit of its operations to determine the severity of their emissions
to the environment. the audit of the company’s emission came after complaints from doctors on
the increased miscarriage and respiratory conditions that affected the people in the region. The
company pointed the medical issues to their emission to Cherokee River, therefore, making it
imperative to devise alter...


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