1. If you are a major shareholder or an owner of a company, what could you do to make sure that your hired top managers are working in your interest? 2. If a firm is growing at its internal growth rate forever, what will happen to its capital structure or debt equity ratio? And why? 3. If you want to start a business, what long-term investments do you plan to choose and what assumptions and methods do you use to estimate your sales growth rates?

1)  As a shareholder, I have no direct control over what happens in the business. I'd influence the HR situation via the CEO. As the owner, I'd have a site down with the Head of HR to design a compensation plan that ties the performance of the Managers to the profitability of the company. One of such HR strategies are:

2)  Internal Growth Rate is the maximum level of expansion attainable for a company using only self-financing or profits reinvested.

When this is the case, the company's capital structure will comprise mostly of ploughed back profits.

The Debt to Equity ratio will tend towards zero. This is because the company is funded more from Equity than from debt.

3) A long-term investment refers to an asset remains in the company's holding/books for a year and above. Its value is usually recorded on the assets part of a company's balance sheet. Investments which can be held for the long term are stocks, bonds, real estate, and interest earning savings.

Prior to igniting a startup, best practice requires that one holds a combination of various kinds of long-term investments. This portfolio will depend on a host of various factors such as:

Government Bonds, Rent earning Real Estate and Interest-Earning Savings are relatively safe options. A ratio of 20:20:40 respectively will make for a great combination. The ratio for cash reserves is highest because, the higher the cash, the higher the interest. Besides, it's safe to keep maintain longterm investment that can be quickly converted when the need arises.

Sales Forecasting

As a startup, I'd go for the Intuitive Forecasting Method.

This method has a lot of demerits as it is not based on historical evidence or data. However, it's the best way to start off. If combined with market intelligence, (that is, data of businesses in a similar industry) this method can prove to be more effective.

Cheers!

1   all nations face the problem of scarcity because there are limited resources and unlimited wants. nations do not have enough factors of production to produce everything that their population wants. entrepreneurial resources initiate businesses to make new goods and services; labor resources produce goods and services.

2 there are four factors of production: natural resources, labor resources, capital resources, and entrepreneurial resources. natural resources are raw materials from nature that are used to produce goods. trees, water, and grains are natural resources. some natural resources, such as wheat and cattle, are renewable

3 wants

things that you do not need to have in order to survive, but would like to have

needs

things that you must have in order to survive

goods

physical products

services

tasks that a business perform for customers

resources

items that people can use to make or obtain what they need or want

determine

to settle or decide by choice of alternatives or possiblities

4 i really dont know

answer; yield to maturity;