ECO 550 Assignment 3: Long-Term Investment Decisions

Assume that the low-calorie frozen, microwavable food company from Assignments 1 and 2 wants to
expand and has to make some long-term capital budgeting decisions. The company is currently facing
increases in the costs of major ingredients.

Use the Internet and Strayer databases to research government policies and regulation.
Write a six to eight (6-8) page paper in which you:

1. Outline a plan that managers in the low-calorie, frozen microwaveable food company could follow
in anticipation of raising prices when selecting pricing strategies for making their products
response to a change in price less elastic. Provide a rationale for your response.

2. Examine the major effects that government policies have on production and employment. Predict
the potential effects that government policies could have on your company.

3. Determine whether or not government regulation to ensure fairness in the low-calorie, frozen
microwavable food industry is needed. Cite the major reasons for government involvement in a
market economy. Provide two (2) examples of government involvement in a similar market
economy to support your response.

4. Examine the major complexities that would arise under expansion via capital projects. Propose
key actions that the company could take in order to prevent or address these complexities.

5. Suggest the substantive manner in which the company could create a convergence between the
interests of stockholders and managers. Indicate the most likely impact to profitability of such a
convergence. Provide two (2) examples of instances that support your response.

6. Use at least five (5) quality academic resources in this assignment. Note: Wikipedia does not
qualify as an academic resource.

Your assignment must follow these formatting requirements:

• Be typed, double spaced, using Times New Roman font (size 12), with one-inch margins on all
sides; citations and references must follow APA or school-specific format. Check with your
professor for any additional instructions.

• Include a cover page containing the title of the assignment, the student’s name, the professor’s
name, the course title, and the date. The cover page and the reference page are not included in
the required assignment page length.

The specific course learning outcomes associated with this assignment are:

• Propose how differences in demand and elasticity lead managers to develop various pricing
strategies.

• Analyze the economic impact of contracting, governance and organizational form within
organizations.

• Use technology and information resources to research issues in managerial economics and
globalization.

• Write clearly and concisely about managerial economics and globalization using proper writing
mechanics.