The following appeared in a letter from a firm providing investment advice to a client.

“Homes in the northeastern United States, where winters are typically cold, have traditionally used oil as their major fuel for heating. Last year that region experienced 90 days with below-average temperatures, and climate forecasters at Waymarsh University predict that this weather pattern will continue for several more years. Furthermore, many new homes have been built in this region during the past year. Because these developments will certainly result in an increased demand for heating oil, we recommend investment in Consolidated Industries, one of whose major business operations is the retail sale of home heating oil.”

Write a response in which you discuss what questions would need to be answered in order to decide whether the recommendation and the argument on which it is based are reasonable. Be sure to explain how the answers to these questions would help to evaluate the recommendation.

Consolidated Industries is suggesting that their client invest in Consolidated Industries because of the weather conditions in the northeastern United States. The recommendation assumes that the clients will have no alternative fuel available to them during the cold months. Weather patterns alone do not dictate the need for alternative fuels, nor do they dictate the best alternative fuel to use. The recommendation is based on the assumption that clients unwilling to invest in alternative fuels are at the mercy of their region’s weather patterns. The clients of the firm are wealthy industrialists, and it is unlikely that they will be limited to alternative fuels because of the high prices of heating oil. Instead, Consolidated Industries should suggest alternative fuels for its clients. The clients’ main alternative fuel source is coal, and coal is plentiful in the region.

The clients’ homes should be thoroughly inspected, and any energy-wasting appliances, such as older refrigerators, should be replaced. If the client is unwilling to replace such appliances, Consolidated Industries should recommend installing energy-efficient appliances, such as refrigerators or furnaces that utilize natural gas. The clients should also upgrade their heating systems to include newer models that use natural gas. If the clients use oil heat, they should install an oil burning furnace that burns cleaner than older models. These investments will result in significant savings in fuel costs.

The clients should also be advised to insulate their homes. The insulation should be installed throughout the home, including the basement. The insulation should be installed as close to the ceiling as possible. The insulation should fill all the spaces between floorboards, and it should extend at least six inches up the walls. The insulation should also be installed under cabinets in the kitchen. If the clients have old windows or doors, they should be removed and replaced with energy-efficient models.

The clients should also be advised to invest in solar panels. Solar panels can be installed on the roof, and electric power generated by the solar panels can offset some of the heating costs of their homes. The clients need to research the cost of installing solar panels before making a decision. The clients should also be advised to install ceiling fans in each room. Ceiling fans can circulate cool air throughout the house.

The client should also purchase high-efficiency space heaters. These heaters use less energy than older heaters and are more effective. The clients should purchase a space heater that has a thermostat that can adjust the heater’s output to maintain the temperature in the home and a timer that can be set to run only when necessary.

The clients should also be advised to invest in insulation for their homes. The insulation should be installed under all floors, in the attic, and around the exterior of the house. The insulation should be installed in the attic and around the exterior of the house so that it can be used in colder temperatures. The insulation should fill all spaces between floorboards and the walls.

The clients should also purchase energy-efficient light bulbs. These light bulbs use less energy than incandescent bulbs and emit less heat. The clients should use the lamps only when necessary. When not in use, the bulbs should be turned off.

The clients should purchase insulation for their vehicles. The insulation should be installed in the trunks and the undercarriages of the vehicles. The insulation should be installed close to the floor. The insulation should fill all spaces between floorboards and the walls.

The clients should also purchase fuel-efficient vehicles. The vehicles should have excellent mileage, and they should run on gasoline or diesel. The clients should buy vehicles that have the highest fuel economy ratings.

The clients should invest in alternative fuel sources. If Consolidated Industries is recommending Consolidated Industries, then the firm should recommend alternative fuels that are far less expensive than oil. The clients should invest in wind and solar power. These sources of power have become increasingly inexpensive. The clients should also invest in geothermal power. Geothermal power uses the earth’s temperature to heat and cool homes.

The clients should invest only in energy sources that they actually use. The clients should purchase solar panels that generate power only during the summer months. The clients should invest in space heaters that generate heat only during the winter. The clients should also invest in energy-efficient light bulbs. The clients should insulate their homes, but they should rely on their heating systems in the winter.

The clients should also be aware of the environmental hazards of using fossil fuels. Fossil fuels, such as oil and coal, are finite resources. Their extraction and consumption are harmful to the environment. When the fossil fuels are depleted, they will become unavailable, and the price of oil will skyrocket.

The clients should invest in alternative fuel sources only if they are willing to live with the ramifications of their purchases. If they purchase oil, they will experience high fuel costs, but they will have an alternative to fossil fuels when they can no longer afford it.

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