Guillermo Furniture Store Concepts Paper

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Date Submitted: 10/02/2012 06:34 PM

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Guillermo Furniture Store Concepts Paper

In this paper, I will attempt to provide an analysis of the Guillermo furniture store concepts paper. I will explain some finance concepts found in the readings and how they relate to the context of the scenario (University Of Phoenix, 2009).Guillermo Furniture Store Guillermo furniture store is located in Sonora, Mexico. The store is owned and operated by Guillermo Navallez (University Of Phoenix, 2009). Sonora has a good supply of timber, and Guillermo furniture store specializes in the manufacture of tables and chairs due to wood being relatively inexpensive. Current business trend s includes entering of new competitors from overseas that are using high technology for production and can be more efficient with minimal waste. Secondly, there is rising a cost of labor in the store’s vicinity and therefore affecting the store’s profit margin (University Of Phoenix, 2009). The foregoing occurrences has prompted Guillermo to consider various business alternatives, including merging with other companies, introduction of technology into the manufacturing process, or becoming a distributor to a competitor (University Of Phoenix, 2009).Finance Concepts and Principles Financial principles, financial markets, and ethics form a foundation for the financial decisions that managers routinely make (Emery, Finnerty, & Stowe, 2007).Some of the finance concepts and principles that apply to the Guillermo furniture store scenario, include: The principle of self-interested behavior, with the following extensions – opportunity costs, and the signaling principle: Actions convey information. The principle of valuable ideas and the principle of risk return (Emery et al, 2007).

Guillermo Furniture Store ConceptsPaper

The principle of self-interested behavior states that ‘when all else is equal, all parties to a financial transaction will choose a course of action most beneficially advantageous to themselves’. This principle is demonstrated...