Interest paid would be included in the operating activities category on the statement of cash flows
Indicate whether the statement is true or false
T
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Exhibit 20-5 The Baltimore, Inc entered into a five-year lease with the Waugh Chapel Company on January 1, 2016. Baltimore, the lessor, will require that five equal annual payments of $25,000 be made at the beginning of each year. The first payment will be made on January 1, 2016. The lease contains a bargain purchase option price of $12,000, which the lessee may exercise on December 31, 2020
The lessee pays all executory costs. The cost of the leased property and its normal selling price are $95,000 and $118,236, respectively. Collectibility of the future lease payments is reasonably assured, and the lessor does not expect to incur any future costs related to the lease. Present value factors for a 7% Present value of $1 for n = 1 0.934579 Present value of $1 for n = 5 0.712986 Present value of an ordinary annuity for n = 5 4.100197 Present value of an annuity due for n = 5 4.387211 ? Refer to Exhibit 20-5. If Baltimore requires a 7% annual return, how should the lease be classified? A) operating lease B) direct financing lease C) sales-type lease D) leveraged lease
The closing statement in a formal letter can ____.
A. express goodwill B. make a polite comment C. ask the reader to take action D. any of the above
A supplier that has previously demonstrated its performance capabilities through purchase contracts may well receive:
A) maverick status. B) a request for description. C) preferred supplier status. D) a request for proposal.
The Omnicare, Inc v. NCS Healthcare, Inc case discussed in the text, involved a question of whether directors of an insolvent publicly traded company violated their fiduciary duty when they entered into an agreement for the sale of the company to a particular interested buyer regardless of other offers. The court ruled that:
a. the directors violated their fiduciary duty and lacked the authority to agree to an absolute lock-up guaranteeing the sale and agreeing to forgo consideration of future offers. b. the directors violated their fiduciary duty because the agreement was kept secret from majority shareholders but that, otherwise, the agreement foregoing consideration of future offers would have been valid. c. the directors violated their fiduciary duty because the agreement was kept secret from minority shareholders but that, otherwise, the agreement foregoing consideration of future offers would have been valid. d. the directors satisfied all fiduciary duties because there was no evidence of bad faith or self dealing.