Sunday, November 17, 2019

Legal and Ethical Issues Term Paper Example | Topics and Well Written Essays - 1750 words

Legal and Ethical Issues - Term Paper Example The loan was granted to assist the company in meeting then financial requirements for constructing an additional manufacturing plant. The administration stopped the additional capital inflows the Solyndra a step that made them close down and more than a thousand employees lost jobs (Anderson, 2012). Production activities stopped, and the company had to explain what made them make such a decision. As the management explained, there was a persistent increase in the production cost while the prices of the solar panels were decreasing. These could not tally and, therefore, the company ended up making huge losses. The cause of the fall in prices of solar panels was that Chinese developers had come up with cheaper ones which served the purpose of the Solyndra’s. According to the Washington post (2011), â€Å"the foreign manufacturers were supplying cheaper solar panels due to government subsidies a move that made the market prices of the solar panels to decline forcing Solyndra to reduce their prices for it to remain competitive†. Another problem that was lightly disclosed that the company had delayed accounts receivables that they failed to collect in the correct time. The foreign competitors had better terms of sale since they used to extend their customers’ payment terms (Anderson, 2012). There was no compliance with the good terms in the side of the Solyndra’s customers. There was an attempt to get the company back to business where one of the shareholders provided $75 but that was in vain. The loan processing was made possible as a result of an energy law that was passed in 2005 to authorize the department to issue federal backed loans for innovative projects that helped in reducing air pollution. The study intends to evaluate the legal and moral issues that relate to the circumstance of Solyndra. Legal issues to be addressed included the involved the company finances, contracts, payment of private investors and laying down of

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