Coffee and More Scenario
Coffee and More (Coffee), a corporation that is not publicly traded, owns and operates ten coffeehouses in Your State, U.S.A. The company has been in business for eight years. Each Coffee and More store sells gourmet coffee (brewed only), pastries, bagels, compact discs, and books. Coffee also offers Internet connections for customers to access their e-mail.
During the sixth and seventh years of business, Coffee and More showed profit and growth possibilities. However, the overall economic conditions in the market place made year eight a struggle. The price of coffee increased and there was more competition.
The product is still viable. If Coffee wants to stay in business, however, changes must be made. Otherwise, bankruptcy is looming in the future.
The corporation has assets that consist of real property (land and building that house the main coffee house and corporate headquarters), equipment, inventory, accounts receivable, modest holdings, and cash accounts. The majority of the assets are not liquid. The real property is mortgaged and used as collateral on two other secured credit transactions. There is also some unsecured debt. Liabilities include leased equipment and building leases for the other nine locations. Other debts include accounts payable, the usual overhead, as well as benefit and payroll expenses.
The owners of Coffee and More have come to you for advice. Below is a list of their questions for you to answer. Be as detailed as possible and use documented research as appropriate to support your answers. Write a 1,000 to 1,400 word response to the following questions(if your answer to a particular question is shorter than the question, I would suspect your answer isn't sufficient)(MAKE SURE THAT YOUR ANSWERS RELATE RELEVANT LEGAL CONCEPTS TO THE SPECIFIC FACTS OF THE SCENARIO).
(a) Earlier this year, Coffee and More hired a contractor to make some repairs on the corporate headquarters. Coffee received lien notices from subcontractors hired by the general contractor, stating that they had a lien on the building for the amount of their services. Coffee paid the general contractor for the completed work three months ago, but never received lien releases. Explain the types of liens involved, the reasons the liens were put in place, and what steps need to be taken to obtain the releases
(b) Coffee and More wants to take advantage of the increased value of the property they own. Explain what Coffee needs to do to be able to refinance the property. Examine the functions and applications of secured and unsecured interests. What is the priority of claims? Are there any exceptions?
(c) Coffee talked to a loan company that wanted to use a floating lien. What is a floating lien?
(d) Should Coffee consider selling coffee grounds, coffee beans, and coffee equipment in their coffeehouses? How could this be financed?
(e) Coffee wants to know about a stock offering. Is it a good option? What type of offering should Coffee use? Why? What does Coffee need to prepare? How long does it take?
(f) What about franchises? Would this be a good idea? What type of franchise? What should the franchise agreement include? What liability, if any, would Coffee have for the franchisees?
(g) If nothing else works, should Coffee and More file bankruptcy? If so, what kind? Why would Coffee use your suggestion as opposed to other forms of bankruptcy? What is the filing process?© BrainMass Inc. brainmass.com October 24, 2018, 7:00 pm ad1c9bdddf
Based on the Coffee and More Scenario, this solution discuuses the questions posed.
How Public and Private Decisions Affect Price Levels and Supply/Demand
Discuss the situation by writing the solutions, and then show the solutions
In the early part of the last decade, there was an overproduction of coffee. The price dropped so low that producers' costs were higher than the market price. The reason this happened was that market prices became high before this, and the supply of coffee increased substantially. In the meantime, demand for coffee and everything else remained the same. Price Level 1.
Coffee prices came down again, at first overshooting the former equilibrium price, throwing the coffee market into confusion. In the meantime, gourmet coffee houses began appearing, which began charging a premium for coffee in the period of falling prices. Price Level 2.
Gourmet coffee houses tend to open in high-rent areas and cater to higher income consumers. Because of the change they created for taste and preferences and the higher income market, the gourmet coffee houses had a win-win in a period of falling wholesale prices and increasing retail prices. Price Level 3.
But in the middle of the decade, the party was over, and wholesale prices started increasing because of some shortages caused by weather and the rising overall market prices again. Where is the new equilibrium price? Price Level 4.
Explain the changes in the supply and demand curves based on the above information. Draw a graph showing how the changes affect the price levels, supply and demand.
You have been asked to discuss the differences between the microeconomic definitions of supply and demand and the macroeconomic differences of aggregate supply and demand. Discuss what determines supply and demand and aggregate supply and aggregate demand. Explain what causes movements along the curve and shifts in the curve for supply and demand and aggregate supply and aggregate demand (make sure that you include price as a variable). Include whether this is an example of the microeconomic definition of supply and demand or the macroeconomic definition of aggregate supply and demand. Most importantly, did this cause a shift in the curves or a movement along the curves? What happened to equilibrium price, supply, demand, aggregate supply or aggregate demand? Describe your graphs.
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The PPF curve shows the economic choices a country can make about production given scarce resources, a given technology, and a given quantity of inputs. Assume you are a developing country, producing food and clothing at maximum capacity. What could happen when foreign investors start investing in your country?
Discuss what type of foreign investments would be best for the economy's PPF. What are the opportunity costs of these decisions?
Include what will happen to private and public choices as the economy grows. Support your discussion of these issues and consequences using at least 2 graphs.View Full Posting Details