Both managerial and financial accounting are governed by GAAP

Indicate whether the statement is true or false


False

Business

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Patrol, Inc, leased a machine from Ravel Company. The lease term was for a five-year period beginning January 1 . 2014 . Equal annual lease payments of $3,000 are due on December 31 of each year. The implicit rate of the lease is 10% and is known to Patrol. Patrol has properly applied the lease capitalization criteria and as a result, accounts for the lease as a capital lease. The first payment

under the lease was made on December 31 . 2014 as scheduled. How much should Patrol classify as the current portion of the lease liability at December 31 . 2014? a. $2,049 b. $7,460 c. $3,000 d. $9,509

Business

As companies diversify into new businesses, managers are inevitably faced with a make or __________ decision.

A. buy B. lease C. forego D. substitute

Business

Reading Corporation is considering an investment opportunity with the following expected net cash inflows

Year 1, $250,000; Year 2, $350,000; Year 3, $395,000. At the end of Year 3, the residual value of the investment would be $50,000. The company uses a discount rate of 12%, and the initial investment is $400,000. Calculate the NPV of the investment. Present value of $1: 11% 12% 13% 14% 1 0.901 0.893 0.885 0.877 2 0.812 0.797 0.783 0.769 3 0.731 0.712 0.693 0.675 4 0.659 0.636 0.613 0.592 5 0.593 0.567 0.543 0.519 What will be an ideal response

Business

Demand for soccer balls at a new sporting goods store is forecasted using the following regression equation:

Y = 98 + 2.2X where X is the number of months that the store has been in existence. Let April be represented by X = 4. April is assumed to have a seasonality index of 1.15. What is the forecast for soccer ball demand for the month of April (rounded to the nearest integer)? A) 123 B) 107 C) 100 D) 115 E) None of the above

Business