Which of the following benefits cannot be excluded as a no-additional-cost service fringe benefit?
A. A car wash at an automobile dealership.
B. Complimentary dry cleaning for employees at a laundry company.
C. Free local phone service for phone company employees.
D. Free tax return preparation from a client.
Answer: D
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A sample of positive confirmations is mailed for material accounts receivable balances. Frequently there is a lack of response. Which of the following is not an acceptable alternative procedure?
a. Reviewing collections on the account subsequent to the confirmation date. b. Inquiry of management. c. Mailing second and third confirmations. d. Examination of supporting documents.
Postponement is valuable for a firm that sells a large variety of products with demand that is independent and comparable in size
Indicate whether the statement is true or false.
Florida Car Wash is considering a new project whose data are shown below. The equipment to be used has a 3-year tax life, would be depreciated on a straight-line basis over the project's 3-year life, and would have a zero salvage value after Year 3. No change in net operating working capital would be required. Revenues and other operating costs will be constant over the project's life, and this is just one of the firm's many projects, so any losses on it can be used to offset profits in other units. If the number of cars washed declined by 40% from the expected level, by how much would the project's NPV change? (Hint: Note that cash flows are constant at the Year 1 level, whatever that level is.) Do not round the intermediate calculations and round the final answer to the nearest whole
number. ? WACC10.0% Net investment cost (depreciable basis)$60,000 Number of cars washed2,960 Average price per car$25.00 Fixed op. cost (excl. depr.)$10,000 Variable op. cost/unit (i.e., VC per car washed)$5.375 Annual depreciation$20,000 Tax rate35.0% ? A. -$37,560 B. -$37,184 C. -$39,814 D. -$38,687 E. -$36,433
The Bill of Rights was included in the U.S. Constitution when it was originally ratified by the states
Indicate whether the statement is true or false