Reference no: EM131930069

You are speaking for the executive board of a small oil company, Future Fuel, in Colorado. The CEO and founder, Alica Hardy, is very avid supporter of sustainability and innovation. He insists that money invested now will pay off in big dividends down the road. Everyone involved has a legitimate concern for the environment and share and support Hardy in her personal and business philosophy. Everyone is also very aware of the momentum of the growing "green" movement. The R&D (research and development) budget for seeking new renewable and viable alternative sources of energy has traditionally been between 22-24% of your operations revenue. The board has decided to increase that budget line item to 35% for the next fiscal year on the strong recommendation of Hardy.

Additionally, it has been decided to equip the headquarters and other 8 sites in the west with active solar energy systems and wind power generators. This is a publically held company and the stock has been less than stellar in its last 3 quarters' performance. The third quarter just ended, and the quarterly shareholders' meeting is about to be held. The earnings after operating costs are modest. You, as the board representative, are announcing your numbers and the plans to increase the R&D budget and installation of renewable energy systems.