1. Evaluate the following quote:

The major advantage to outsourcing is that it reduces a company's capital costs, freeing the company to use scarce capital for other purposes.

2. In explaining the recent acquisition of a supplier, an executive made the following argument: "We purchased the supplier so that we could keep the profit rather than pay it to some other firm." Evaluate this argument.

3. Cable television companies lay cables to individual households in the communities they serve to carry the television signal. How specific is this investment? What kind of arrangements would you expect the cable companies to make with local communities about the pricing and taxation of cable services? Explain.