The chapter stresses the need to recover the full cost of capital for future endeavors. Can you think of an instance when “breaking even” would be a good business decision? Think of the ethical side of being an employer in your decision.

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In reference to your question, I can think of several instances where it would make perfect business sense to simply break even.

One that does not necessarily consider the ethical side of being an employer, but is worth discussion, is trying to put a strapped competitor out of business. A competitor who is known to have poor liquidity could be forced out of business in a relatively short time if you are willing to break even. You discount your prices to a point to where they cannot afford to pay their bills after following suit, and you put them out of business, and pick up many of their accounts.

Specifically to what you asked, however: You wanted to know an instance where an employer might have the ethical duty to break even. Here is a scenario where the employer can save the business and be ethical at the same time. A large manufacturing facility located in small town America employs 35% of the population within …

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