Legal Issues and Managerial Finance

Solution Preview

Consider a financial situation that has the capacity to test your faith or stretch the boundaries of what might be considered as legal., or choose a situation you have experienced personally and write as a narrative, You can also select a case to analyze.

Write a 1200-1500 word paper describing the situation and your thoughts regarding (or approach to) the situation. How might your own faith inform the situation? How might financial regulations inform the situation?

The financial situation I will describe is based off the real life scenario that a relative of mine experienced, and the question of legality had to be posed as well as a question of faith. As an ordained minister, i was asked by my relative whether or not I felt his actions were in accordance with religious and ethical values as well as whether or not I believed that he was justifiable in running his business. I will provide a brief overview of the situation, business, and ethical and religious questions as well as whether or not it was a considered legal and just.

My relative was a recent collegiate dropout who had no job and was basically living with his mother with limited life prospects. He was 19 or 20 years old when a business proposition was offered to him to make some extra cash. The business proposition involved reselling items that were bought at extremely discounted prices such as $1 back to the original store for their full price. The items, which were discontinued by the Big Market retail store, but not taken out of their system, would be bought in large bulk by dollar stores ran by natives of India for pennies on the dollar. Therefore, the dollar store would purchase 1000s of products from the Big Market retail store for pennies on a dollar, and then re-sale these items to the general public for a profit, which is business 101. So to recap, the large Big Market retail store bought these items that were made in China for extremely cheap prices, attempted to sell these items to the public for extremely high prices, took the items off the market and resold them to the dollar store for pennies on a dollar, but failed to take these items out of their price systems within their stores.

My relative was asked to return some of these items that were bought at the dollar store for $1 but were still in the system of the Big Retail Market store for $20. My relative returned $500 worth of these items, which only cost $25 at the dollar store, back to the Big Market store for a $500 gift card. My relative construed these actions as simply engaging in the same type of commerce that the big Capitalistic company who originally bought these items does. Big Market retailers buy products that are made in Third World countries by citizens of these countries who make maybe $2 a day, and ...