A lease contains a bargain purchase option. In determining the lessee's capitalizable cost at the beginning of the lease term, the payment called for by the bargain purchase option would be
a. subtracted at its present value.
b. added at its exercise value.
c. added at its present value.
d. subtracted at its exercise price.
C
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During 2018, Lang Corporation reported cost of goods sold of $775,000. During the year inventory decreased $25,000 and accounts payable increased $12,500. How much cash was paid to suppliers during 2018?
A. $812,500 B. $737,500 C. $787,500 D. $762,500
Which of the following models can be used when demand exhibits both trend and seasonal patterns?
A. simple exponential smoothing B. second-order or double smoothing C. third-order or triple smoothing D. complex exponential smoothing
Mulroney Corp. is considering two mutually exclusive projects. Both require an initial investment of $10,800 at t = 0. Project X has an expected life of 2 years with after-tax cash inflows of $6,600 and $7,400 at the end of Years 1 and 2, respectively. In addition, Project X can be repeated at the end of Year 2 with no changes in its cash flows. Project Y has an expected life of 4 years with after-tax cash inflows of $4,300 at the end of each of the next 4 years. Each project has a WACC of 8%. Using the replacement chain approach, what is the NPV of the most profitable project? Do not round the intermediate calculations and round the final answer to the nearest whole number.
A. $3,442 B. $3,718 C. $3,408 D. $3,339 E. $2,960
Which of the following is an argument against social responsibility?
A. Business has resources needed to tackle today's complex social issues. B. Because business is a part of our society, it cannot ignore social issues. C. Corporate time, money, and talent should be used to maximize profits. D. By helping resolve social issues, business can create a more stable environment. E. Socially responsible decision making by firms can prevent increased government intervention.