1. The General Manager (GM) of a car dealership is working on a three year business plan. The GM expects inflation to rise over the next three years.
- How will higher inflation affect the number of vehicles the dealership can sell?
- Based on the GM's inflation expectation what type of loan should the dealership arrange with its bank in order to finance its inventory of automobiles?
2. Fountain Plus, Inc. a manufacturer of bottled water, has enjoyed rapid growth in sales of one of its flavored water products, Xtrafresh, for which it has a patent, which has just expired. It now faces fierce competition from a number of other bottled water manufactures in the case of Xtrafresh.
- As a manufacturer in the bottled water industry, what type of a market does Fountain Plus, Inc operate in before and after the patent expired? Explain why
- What will happen to Fountain Plus, Inc now that the patent has expired?