Answer:
Land $80,900
Building $643,000
Explanation
Land
Demolition of old building $9,000
Sale of salvaged materials (1,100)
Legal fees (for title investigation of land) 3,000
Purchase price of land $70,000
Total $80,900
Building
Architect fees (for new building) 20,000
Building construction cost 600,000
Interest cost related to the construction 23,000
Total $643,000
Complete Question:
James Stilton is the chief executive officer (CEO) of RightLiving, Inc., a company that buys life insurance policies at a discount from terminally ill persons and sells the policies to investors. RightLiving pays the terminally ill patients a percentage of the future death benefit (usually 65%) and then sells the policies to investors for 85% of the value of the future benefit. The patients receive the cash to use for medical and other expenses, and the investors are "guaranteed" a positive return on their investment. The difference between the purchase and sale prices is RightLiving's profit.
Stilton is aware that some sick patients may obtain insurance policies through fraud (by not revealing their illness on the insurance application). An insurance company that discovers such fraud will cancel the policy and refuse to pay. Stilton believes that most of the policies he has purchased are legitimate, but he knows that some are probably not.
Requirement:
What are other ethical concerns that Stilton may be facing?
Answer with Explanation:
The ethical concerns of Stilton are as under:
- Should he tell the investors about the fraud about the policies before making sales?
- What policies must be implemented so that the legitimate people can easily sell the policies and if not implemented it would not be fair for the RightLiving, Inc.
- Stilton will also be facing ethical concerns because the business wishes that the customer dies early so that they can benefit from increased deaths of policy holders.
Answer:
Accounting costs $145,000
Implicit costs $75,000
Opportunity costs $220,000
Explanation:
What her accounting cost will be during the first year of operation.
Based on the information given we were told that the annual overhead costs and operating expenses amounted to the amount of $145,000 which means that the amount of $145,000 will be the ACCOUNTING COSTS
Her IMPLICIT COSTS will be the amount of $75,000 which is the amount she earn in her current job per year.
Her OPPORTUNITY COSTS be the addition of both her Her accounting cost and implicit costs
Hence,
Opportunity cost=$145,000+$75,000
Opportunity cost=$220,000
