- Predict the economic and business environment over the next five (5) years, indicating at least two (2) ways it may impact Durango Manufacturing Company's ability to achieve the desired 10% growth in revenue. Provide support for your prediction.
- Formulate a strategy to improve the opportunities for Durango to reach its revenue goals (i.e., increase revenue by 10% within five  years).
- Use the Internet to research a company similar to Durango that has been accused of committing fraud. Determine the specific internal control that was defective, along with aspects of corporate cultural environment that contributed to the fraud or unethical behavior. Based on these findings, determine how improving this internal control failure can mitigate future risks.
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According to the Congressional Budget Office, the economic growth will remain slow this year. After this year the Congressional Budget Office feels that the economic growth will speed up. The unemployment rate is expected to remain above 7 ½ percent through next year. After the economy adjusts this year to the fiscal tightening inherent in the current law, the economic factors will lead to more rapid growth. The projections of the Congressional Budget Office are that there will be a 3.4 percent growth in 2014 and an average of 3.6 percent a year from 2015 through 2018. It feels that the effects of housing and financial crisis will decline and that an upswing in housing construction and increasing availability of credit will lead to faster growth in employment, income, consumer spending, and business investment. The economic and business environment over the next five years is expected to improve gradually. There are two ways in which it will impact Durango's ability achieve 10% growth in revenue. First, there will be an increase in demand for the products manufactured in the US market. Second, ...
The answer to this problem explains how the challenge of achieving growth can lead to frauds. The references related to the answer are also included.
Business plan for a start-up, medium-sized public manufacturing company
You have been selected as the consultant to develop a business plan for Durango Manufacturing Company, which is a start-up, medium-sized public manufacturing company. The CEO has a background in manufacturing and is well versed in supply chain management. However, the CEO has limited experience in financial management and creating value for the various stakeholder groups. Your business plan must include a five (5) year strategy to increase revenues by 10% and a recommendation for creating an organizational structure to comply with SOX mandates for strong corporate governance over the internal controls. Your business plan must also include prescriptions for creating an ethical environment. Your recommendation must be approved by the Board of Directors before the company can begin its operations.
1.As the consultant, create an argument that you will present to the CEO that suggests accounting and financial management knowledge and skills will be essential to the company's success and stability over the next five (5) years. Provide support for your argument.
2.Suggest to the CEO how the company's stakeholders (investors, lenders, and employees) will use financial statement information and ratio calculations to make key determinations related to the financial condition and operational efficiency of the company. Provide support for your rationale.
3.Given the strategy to increase revenue during the five (5) year plan period, which will need to be achieved through expansion and capital expenditures, determine which capital budgeting ratio is appropriate for Durango to evaluate its proposals for capital expenditures, such as NPV, IRR, etc. Defend your position.
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