Ton Janner a 26-Year-Old Entrepreneur Started Bells & Whistles (B&W)

Ton Janner a 26-year-old entrepreneur started Bells & Whistles (B&W) Inc. a firm that specializes in top-of-the-line add-ons for computer systems. The firm has a capital structure of approximately 60% debt. This was necessitated by the rapid growth of B&W and Mr. Janner's lack of personal funds to sustain the growth. The 60% debt amount is quite high for firms in this field and in fact slightly exceeds the debt covenants negotiated with the bank. B&W recently received notice that the bank considers the company's debt to be excessive and that some accelerated repayment schedule will be adopted. The notice came at a particularly bad time. B&W is in the midst of a major upgrade of its own computer system. The hardware was to have been purchased outright financed by the seller Karl miner longtime friend of Mr. Janner.
Mr. Miner really needs Mr. Janner's business. Both believe in the long-term strength of B&W. He therefore suggests to Mr. Janner that the equipment be purchased by means of a short-term lease. Mr. Janner could renew the lease annually.
Required:
1. Is Mr. Miner's suggestion ethical? Explain.
2. If Mr. Janner accepts the suggestion is he behaving ethically? Explain.

Correct Answer:

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1. Mr. Miner's suggestion is ethical at ...

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