What effect will an overstatement of ending inventory at the end of Year 1 have on the amounts reported on the Year 1 financial statements?
A. Overstatement of cost of goods sold
B. Understatement of retained earnings
C. Overstatement of total assets
D. Understatement of net income
Answer: C
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Momentum Automobiles, an automobile manufacturer, hires Dreams Inc. to cater to its advertising needs. Momentum is only required to provide the necessary finances and does not take part in any decision making. In the given scenario, Momentum Automobiles would be classified as a(n)
A. full-service agency. B. illustrator. C. media organization. D. advertising agency. E. client.
What is the most common type of chart for showing the distribution of a numerical variable?
a. time series graph b. histogram c. bin d. box plot
The process of "systematically gathering and analyzing quantitative and qualitative information to determine whose interests should be taken into account throughout the project" is called:
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Bruce Company is considering replacing one of its delivery trucks. The truck in question was purchased two years ago at a cost of $41,000. At the time of purchase the truck was expected to have a $5,000 salvage value at the end of its six-year life. Given the use of straight-line depreciation, the truck has a current book value of $29,000. If sold today, the company could get $22,000 for the truck. It costs $20,000 per year to operate the existing truck. The new truck would cost $46,000 and would cost only $14,000 per year to operate. The new truck would be depreciated on a straight-line basis over its four-year useful life to its expected salvage value of $10,000. The company's required rate of return is 14%. Ignore income taxes. (PV of $1 and PVA of $1) (Use appropriate factor(s)
from the tables provided.) Required:1) Identify the cash flows for each alternative by completing the following table: Keep Existing TruckReplace Existing TruckYearCash OutflowsCash InflowsCash OutflowsCash Inflows0 1 2 3 4 2) The company's objective is to minimize costs. Complete the following table to determine whether the existing truck should be replaced. Ignore income taxes. What is your recommendation? Keep Existing Truck Replace Existing TruckYear14% PV FactorNet Cash OutflowsPresent Value of Net Cash Outflows Net Cash OutflowsPresent Value of Net Cash Outflows0 1 2 3 4 What will be an ideal response?