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Oksanka [162]
2 years ago
6

Tommy McCartney is a sixteen-year-old high school student. He has worked forty hours per week at the local convenience store ove

r the last year, and has diligently saved $6,000 for the purchase of his first car. While visiting a local car dealership, Tommy finds the “car of his dreams,” a used yellow Camaro. Tommy walks into the dealership, announces to the dealership owner that he is “ready to buy,” negotiates $6,000 as the purchase price, and leaves the dealership a proud car owner. Over the course of the next six months, Tommy drives the Camaro eight thousand miles, wears the tires thin, dents the left front fender, and regrets his purchase. He realizes that in two short years college will beckon, and he knows that his parents cannot afford to pay for his higher education. In short, he wants his money back. On a Saturday morning, Tommy returns to the car dealership, walks into the sales office, and hands the keys to the seller, asking for the return of his $6,000. The dealer chuckles, and then his look turns stern, saying “Son, I don’t owe you anything. You’ve just learned a lesson in the ‘School of Hard Knocks.’ The car is still yours, and the money is still mine!” Who will prevail? Is it legal and/or ethical to allow Tommy to escape his contractual obligations?
Business
1 answer:
Aleks [24]2 years ago
5 0

Explanation:

First of all, the dealer should not have sold the car to the sixteen year old boy without the presence of his parents or any guardian. It is illegal to have a contract with a child who is not legally allowed to drive the car before the age of eighteen.

Now secondly if the dealer has somehow sold the car to the boy, the boy cannot come back after few months and ask for returning his money because he purchased the car, the condition of the condition of the car got worse during the whole time when car was with him, and also there is no legal clause in the agreement which allows him to demand his money back after using the car for this long time. So demanding his money back from the dealer is totally unethical as well as illegal. The dealer is true that the car is still the property of the boy and the money is still the dealer's money.

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IRA stands for Individual Retirement Arrangements. Jimmy can access your money through an IRA withdrawal any time he’d like. There will only be difference in the tax he will have to pay. Without penalty Jimmy in to take his IRA withdrawal once he<span> reaches 59 years. So, Jimmy will have to wait 9 years to be able to withdraw money without penalty.</span>
6 0
2 years ago
Read 2 more answers
Jiminy's Cricket Farm issued a 30-year, 6.3 percent semiannual bond eight years ago. The bond currently sells for 110 percent of
pentagon [3]

Answer:

Explanation:

a.)

Book value of debt is the debt amount in Jiminy's Cricket Farm's balance sheet on the liabilities section. Total book value of debt is calculated by be the summing up of the book values of the two bonds this company has.

Book value of 30 year bond = $135,000,000

Book value of the Zero-coupon bond = $65,000,000

Total book value of debt = $135 + $65 = $200,000,000

b.)

Total market value of debt will be the sum of market values of the two bonds this company has. It is calculated by multiplying the current price of the bond by the number of outstanding bonds.

market value = Price * number of bonds

<u>30 year bond;</u>

Number: 135,000,000/1000 = 135,000 bonds

Market value = 1.10 * 1000 *135,000 = $148,500,000

<u>Zero-coupon bond;</u>

Number: 65,000,000/1000 = 65,000 bonds

Market value = 0.643 * 1000 *65,000 = $41,795,000

Total market value of debt = $148,500,000 + $41,795,000 = $190,295,000

c.)

Aftertax cost of debt is the adjusted interest rate paid on debt because of the benefit of tax shield due to leverage. Since there are two bonds, find the average of the two rates to get after tax cost of debt.

You can find the Pretax cost of debt first. Using a financial calculator, input the following;

<u>30 year bond;</u>

N = 30*2 = 60

PV = -148,500,000

PMT = (6.3%/2)* $135,000,000 = 4,252,500

FV = $135,000,000

then compute semiannual rate; CPT I/Y = 2.804%

Convert to annual rate = 5.607% (this is the pretax cost of debt)

<u>Zero-coupon bond;</u>

N = 12

PV = -$41,795,000

PMT = 0

FV = $65,000,000

then CPT I/Y = 3.749%  (this is the pretax cost of debt)

Next, find the average pretax cost of debt =  (5.607% + 3.749%) /2 = 4.678%

After tax cost of debt = pretax cost of debt (1-tax)

After tax cost of debt = 4.678% (1-0.22) = 3.65%

7 0
2 years ago
The business judgment rule is important because it reflects the principle that ________, not _________, have the greatest latitu
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6 0
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When Terry fed her dog, she noticed that only one can of Alpo Beef Chunk Dinner remained. Since it was the only kind her aging d
pishuonlain [190]

Answer:

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Explanation:

As we have seen that Terry feeds her dog with only Alpo Beef Chunk, she don't consider any other option, product and brand, therefore, she needs very less search and almost no evaluation of any other option available in this product category. In this kind of decision making consumers needs very less information about the product because they know what they are going to purchase and they are very less bothered about the other options. Consumers feel almost no frustration in searching for the information and looking into the shelves for the other brands, they just go straight to the racks and pick their products up. Consumers saves their time by using this kind of decision making. In this kind of decision making, human brain form certain patterns, develop habits and therefore, saves energy.

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You and two partners start a company. However, your partners play no role in running the company. You spend all your time managi
GalinKa [24]

Answer:

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Explanation:

Opportunity cost is described as the return of the choice selected over the potential return that could have been obtained from the choice left  behind. It represents the return of the option chosen compared to the choice forgone. Opportunity costs is also defined as the return of the best next available option.

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