Long Term Investment Decisions

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Business Finance


Assignment 3: Long-Term Investment Decisions

Due Week 9 and worth 300 points

Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to expand, and has to make some long-term capital budgeting decisions. The company is currently facing increases in the costs of major ingredients.

Use the Internet and Strayer databases to research government policies and regulation.

Write a six to eight (6-8) page paper in which you:

  1. Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow in anticipation of raising prices when selecting pricing strategies for making their products' response to a change in price less elastic. Provide a rationale for your response.
  2. Examine the major effects that government policies have on production and employment. Predict the potential effects that government policies could have on your company.
  3. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen microwavable food industry is needed. Cite the major reasons for government involvement in a market economy. Provide two (2) examples of government involvement in a similar market economy to support your response.
  4. Examine the major complexities that would arise under expansion via capital projects. Propose key actions that the company could take in order to prevent or address these complexities.
  5. Suggest the substantive manner in which the company could create a convergence between the interests of stockholders and managers. Indicate the most likely impact to profitability of such a convergence. Provide two (2) examples of instances that support your response.
  6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not qualify as an academic resource.

Your assignment must follow these formatting requirements:

  • Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all sides; citations and references must follow APA or school-specific format. Check with your professor for any additional instructions.
  • Include a cover page containing the title of the assignment, the student’s name, the professor’s name, the course title, and the date. The cover page and the reference page are not included in the required assignment page length.

The specific course learning outcomes associated with this assignment are:

  • Propose how differences in demand and elasticity lead managers to develop various pricing strategies.
  • Analyze the economic impact of contracting, governance and organizational form within organizations.
  • Use technology and information resources to research issues in managerial economics and globalization.
  • Write clearly and concisely about managerial economics and globalization using proper writing mechanics.

Click here to view the grading rubric.

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Running head: Government interventions

Long-term decision making
Name of student
Institutional affiliation


Government interventions


Outline a plan that managers in the low-calorie, frozen microwaveable food company could
follow in anticipation of raising prices when selecting pricing strategies for making their
products' response to a change in rate is less elastic.
In the current world, many people have developed an interest in the low-calorie
microwaveable frozen food. People in busy places such as schools, prisons, or the workplace
find this diet more convenient and comfortable, as the food is ready for consumption and it
provides them with a healthy and balanced diet.
This paper examines the company plan of managers in anticipation of prices changes,
evaluating the effect that the government policies have on the employment and production, as
well as assessing whether or not the government directive ensures equality in the frozen
microwavable food industry. It examines the main complexities which develop undergrowth via
capital ventures and actions to be taken by the government and clear suggestion of the way of
creating convergences between shareholders interest and managers.
The primary focus of the company is to maintain the inelasticity demand for its product.
By definition, the inelastic demand means that the consumers in the market buy goods or service
despite the change in their prices. In other words, the manager strategies on costs do not have a
significant impact on the consumer's preference in buying such products in the market. When the
customer perceives the company’s products and services as necessary, such that they cannot do
without them in the real-life situation, they will be less prone to be influenced by price changes,
hence resulting in a highly inelastic demand. Taking this into account, the company may enhance
the inelasticity of the demand by differentiating its product from that of its main competitors and
offering the customers with some unique value. This is extremely important in the case of the
low-calorie frozen microwaveable food industry, where the demand is relatively elastic, and

Government interventions


customers are highly influenced by the relative pricing strategy of the companies (Pierce et al.,
To increase the price inelasticity, the low-calorie frozen microwaveable food company
should thus make good use of product differentiation in the market. This process of making the
products dissimilar from the competitor's product will make the consumers not substitute the
product with other products. This differentiation will create the equivalent product in the ...

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