Reference no: EM131908953

Problem

Major Communication Company - Resource Use from CSR Report

	Usage	Unit	Cost
Electricity	1,521,000,000	kWh	$ 333,099
Water	607,665,870	gallons	$ 911,499
Waste	11,056,169	pounds	$ 663,370
GHG	55,811	pounds	$ 613,921

Your boss believes that energy prices have gotten as high as they are going to go. He thinks that the carbon market is filled with extra carbon credits and that prices will probably drop before future regulation. He also doesn't see waste as something material enough to pay attention to. He assumes that electricity prices will stay the same. Water prices will likely increase 33% because of drought. He thinks GHG emissions and costs will actually decrease by 50% because of the glut of credits on the market, and he assumes waste will also be the same.

Question 1: Given the information below, and the assumptions above, calculate what the assumed total annual costs will be for this company's resource use.

Your boss doesn't put a lot of weight into climate change and its affect on business. However, you think that it'd be wise to do some modeling because you think that with the drought in California, economic slowdown in China and increased attention to environmentalism because of the Paris UN Summit on Climate Change, that you think there will be higher costs related to resource use for the company.

Model for your boss what a dramatic increase could be next year if GHG credits were double what they are today, and if water is forty percent higher. Assume that electricity will actually go down 20% with the competition that solar and wind are both creating within the market, and the waste just going up a measly 1% because of inflation.

Question 2: Given the information below, and the assumptions above, calculate what the assumed total annual costs will be for this company's resource use.

Your boss understands that the company needs to start being proactive around climate and the effects it will have on business. Therefore, she has moved to a purchasing agreement with the utility to buy 100% renewable energy. This accounts for 75% of the company's total GHG emissions, so emissions should go down by that same amount. But the kicker is that electricity will go up 10%. She also sees the need for massive water conservation. The government has already begun rationing water to farms and homes, therefore she institutes a conservation policy that should save close to 20% on water next year. She also is shifting to a new vendor that handles all composting and recycling, but this will increase costs by about 5%.

Question 3: Given the information below, and the assumptions above, calculate what the assumed total annual costs will be for this company's resource use.