Contract Questions
12/09/2019
Discussion Board For Business Law
12/09/2019

KFC and the Colonel Case Study

Assignment Content —See attachment

  1. Purpose
    This assignment allows students to provide practical business strategies.

    Assignment Instructions
    Review the Week 4 Case Study.

    Summarize the following in 2 to 3 pages:

    • Discuss issues raised concerning Sanders’ approach in connection with the sale to Brown and Massey.
    • Include some of the other options that Sanders may have considered other than the $2,000,000 cash price.
    • Explain the reasons for regulatory control over financial markets.
    • Let’s assume Colonel Sanders obtained a six-month loan of $150,000 Canadian dollars from an American bank to finance the acquisition of a building for another Canadian franchise in Quebec province. The loan will be repaid in Canadian dollars. At the time of the loan, the spot exchange rate was U.S. $0.8995/Canadian dollar and the Canadian currency was selling at a discount in the forward market. The contract after six months (face value = C$150,000 per contract) was quoted at U.S. $0.8930/Canadian dollar.
    • Explain how the American bank could lose on this transaction assuming no hedging.
    • Assume the bank does hedge with the forward contract, what is the maximum amount it can lose?
    • Format your paper to current APA standards.

      Submit the assignment.

    • All of this may seem to indicate that the Colonel did “do chicken right.” His flair for salesmanship and his

      ability to create an attractive image were important factors in creating a successful business—also his

      famous recipe and his emphasis on quality. The question that will always remain, however, is: Should he

      and could he have made a more profitable deal when he sold his company to Brown and Massey?

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