Graded Problems Ch 1.xlsx - Liability comparisons Merideth...

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A. Sole proprietorship owned by Mr Harper means she has unlimited liability and they can come after her personal assets.B. 50-50 partnership of Harper and Black means they will have to cover each others debts.C. Corporation owners can not lose more than they invested.Liability comparisonsMerideth Harper has invested $25,000 in Southwest Devel-opment Company. The frm has recently declbankruptcy and has $60,000 in unpaid debts. Explain the nature of payments, if any, by Merideth in each of the following situaSouthwest Development Company is a sole proprietorship owned by Ms. Harper.b. Southwest Development Company is a 50–partnership of Merideth Harper and Christopher Black.c. Southwest Development Company is a corporation.
Cash flowsIt is typical for Jane to plan, monitor, and assess herfnancial position using cash flows over a given period, typically a month.Jane has a savings account, and her bank loans money at 6% per yearwhile it offers short-term investment rates of 5%. Jane’s cash flowsduring August were as follows:Item Cash inflow Cash outflowClothes -$1,000Interestreceived$ 450Dining out-500Groceries -800Salary4,500Auto payment -355Utilities -280Mortgage -1,200Gas -222
b. Determine the net cash flow for the month of August.593
c. If there is a shortage, what are a few options open to Jane?There is not a shortage but there
d. If there is a surplus, what would be a prudent strategy for her to follow?There needs to be som
495080035528012002224357e is excessive spending on clothes and excessive eating with groceries and dining out.me sort of investment for retirement and she qualifes for a Roth IRA.
Marginal cost–beneft analysis and the goal of thefrmKen Allen, capital budgeting analyst for Bally Gears,Inc., has been asked to evaluate a proposal. The managerof the automotive division believes that replacing therobotics used on the heavy truck gear line will producetotal benefts of $560,000 (in today’s dollars) over the next5 years. The existing robotics would produce benefts of$400,000 (also in today’s dollars) over that same period. An
b. The marginal costs of the proposed new robotics.56000070000490000
c. The net benefit of the proposed new robotics.230000490000-260000
d. What should Ken recommend that the company do? Why?Keep the old robotics because it

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Term
Spring
Professor
ProfessorWhite
Tags
Finance, Bankruptcy, Debt, Netshoes

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