When a firm needs to raise funds in the financial markets, it usually uses the services of an investment banker. last year maverick inc. entered into an agreement with ginobli partners, an investment bank. at the time of issue, ginobli partners has agreed to purchase all offered shares from maverick and then try to sell all shares in the primary market. what kind of arrangement is this? a best efforts arrangement an underwritten agreement in the event that an issuer elects to use an underwritten arrangement, who bears all the risk that the stock issue might be undersubscribed? in other words, who is at risk if the investment bank cannot sell all shares to investors at the time of issue?

Make or buy eastside company incurs a total cost of $120,000 in producing 10,000 units of a component needed in the assembly of its major product. the component can be purchased from an outside supplier for $11 per unit. a related cost study indicates that the total cost of the component includes fixed costs equal to 50% of the variable costs involved. a. should eastside buy the component if it cannot otherwise use the released capacity? present your answer in the form of differential analysis. use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers. cost from outside supplier $answer variable costs avoided by purchasing answer net advantage (disadvantage) to purchase alternative $answer b. what would be your answer to requirement (a) if the released capacity could be used in a project that would generate $50,000 of contribution margin? use negative sign represent a net disadvantage answer; otherwise do not use negative signs with your answers.