Question 1
Financial Instruments are viewed as a means to accomplish many company goals. How to manage these instruments needs to be defined with specificity. What do you feel is the most efficient and effective way to manage financial instruments? Please provide examples.
Question 2
Cost functions essentially break down how a cost reacts over time to changes to the activity that drives it. Variations in the cost drivers explain the variations in cost functions over time. Cost behaviors represent the differences in how these cost functions react over time to the changes of the cost drivers.
Describe an example of a specific cost function, and its associated cost driver. In your description, discuss how changes in the cost driver will impact that cost function and what types of cost behaviors you would expect and why.
Question 3
Dirt Bikes's management believes that the company could benefit from e-commerce. The company has sold motorcycles and parts primarily through authorized dealers. Dirt Bikes advertises in various magazines catering to dirt bike enthusiasts and maintains booths at important off-road motorcycle racing events. You have been asked to explore how Dirt Bikes could benefit from e-commerce and a Dirt Bikes website.
How could Dirt Bikes benefit from e-commerce? Should it sell motorcycles or parts over the Web? Should it use its Web site primarily to advertise its products and services? Should it use the Web for customer service? Justify your response.