Plan A opinion:
In the first plan the problem is the International Drug company not agreeing on the Glass Bottle company plan. The lease agreement will create the International Drug to be under debt.
They will cause to be under default under debt/asset requirement. Under the Glass bottle suggestion plan would not be implemented. In this case there is a seller and a customer everything is fine for the seller in plan A but the customer’s auditor refrain from implementing it due to debt equity requirements concerns. Every company has some debt equity requirements that is a limit on debt holding to run smoothly as set by shareholders and owners. Maybe international has enough debt to its name that it cannot afford to be more debt leasing for …show more content…
Plan B satisfies both the seller and the customer. The international is not going on a 30 year lease debt, and the Glass Bottle is able to receive loan to cover their expenses for production. International is able to record asset from the bottle purchase but will also be reliable for paying the seller any shortfalls that occurs if international is not able to purchase all the products and Glass Bottle the inability to sell in the open market, and fell to to make payments to their debt or make a profit from their expenses. It is clear that Glass Bottle will go under financing debt for taking out a loan from a bank. Only the International had the problem of going under leasing debt. The asset purchase agreement allows International to only be responsible for not buying all the bottles. Otherwise, plan B would work for both of them. If the auditor object plan B then international would not agree to it and Glass would lose its potential customer. It is less likely that the auditors will object plan B because there is an agreement between the seller and customer. The auditors were concerned about the new technology manufacturing without the potential of a customer. Any
In the first plan the problem is the International Drug company not agreeing on the Glass Bottle company plan. The lease agreement will create the International Drug to be under debt.
They will cause to be under default under debt/asset requirement. Under the Glass bottle suggestion plan would not be implemented. In this case there is a seller and a customer everything is fine for the seller in plan A but the customer’s auditor refrain from implementing it due to debt equity requirements concerns. Every company has some debt equity requirements that is a limit on debt holding to run smoothly as set by shareholders and owners. Maybe international has enough debt to its name that it cannot afford to be more debt leasing for …show more content…
Plan B satisfies both the seller and the customer. The international is not going on a 30 year lease debt, and the Glass Bottle is able to receive loan to cover their expenses for production. International is able to record asset from the bottle purchase but will also be reliable for paying the seller any shortfalls that occurs if international is not able to purchase all the products and Glass Bottle the inability to sell in the open market, and fell to to make payments to their debt or make a profit from their expenses. It is clear that Glass Bottle will go under financing debt for taking out a loan from a bank. Only the International had the problem of going under leasing debt. The asset purchase agreement allows International to only be responsible for not buying all the bottles. Otherwise, plan B would work for both of them. If the auditor object plan B then international would not agree to it and Glass would lose its potential customer. It is less likely that the auditors will object plan B because there is an agreement between the seller and customer. The auditors were concerned about the new technology manufacturing without the potential of a customer. Any