As Woodside Petroleum is a fairly established company there is not much risk

As woodside petroleum is a fairly established company

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payments, which will affect the theoretical share price if calculated again in the next year or so. As Woodside Petroleum is a fairly established company, there is not much risk associated with the purchase in shares of the company. If the investor is confident that oil prices will continue its upward trend in 2016 and into 2017, then it is a good purchase. Saudi Arabia’s oil ministry announced that the country is taking back market share from other oil producing countries and this would now drive prices back to previous levels. (CNBC 2016) The shares should not be purchased as a short term investment as prices may drop in the near future, but as a long term investment it could turn out to be profitable as oil prices cannot stay at this level forever. PART B QUESTION 1 The scandal termed Dieselgate started in 2012 when EU updated the environmental classes. This new environmental class tightened the emission standards for nitrogen which is a problem mainly on diesel cars. Adblue is a fluid that is injected into the filters and binds primarily nitrogen particles and was created to accommodate the new emission standards. (Air1) However, the new technic was expensive. In order to not raise production costs Volkswagen (VW) choose to cheat with the software for the cars injection system (Taylor. 2015). As the supplier of the software, Bosch did warn VW that the software was illegal to include in the production of cars and was only for testing purposes. (Taylor. 2015) Eventually, VW admitted that 5 million cars around the world had been manipulated with this software. After the discovered cheating VW stock decreased by 40% in two days. (Taylor. 2015) VW’s action were unethical in many ways. The ramifications of VW actions were great. Firstly, consumers are being cheated. Within the European Union, owners of these cars with lower emissions pay a lower tax and road tax and avoid double registration costs (EuroActiv). VW did not even install the new
filter system in their cars but choose instead to cheat with the emission levels through software. In addition, VW charges a premium for these emission saving cars. When the software is gone, the fuel consumption of the car will increase resulting in more fuel being expended resulting in higher fuel costs for consumers. For VW to sell cars that are billed as having low emissions levels with a higher premium, is unethical towards consumers who fork out money in the knowledge that the cars are more environmental friendly, save on fuel and taxes. Secondly, VW is also able to cut production costs through this action and is also unethical against VW’s competitors that are using the recommended filter system. The competitors are not able to compete with VW’s price by operating within the law. Thirdly, VW actions is detrimental to the environment. Lastly, as a big and reputable automobile company, VW’s actions has an obligation towards society and its workers. Its actions has failed it in being a responsible stakeholder in society. The dent in its reputation might affect its sales and this would have a knock on effect on its workers.

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