Smart Computer Services Had a Service Contract with Johnson College

question 11

Multiple Choice

Smart Computer Services had a service contract with Johnson College to maintain all of the college computers used for instructional services. The college depended heavily on its computer system being maintained properly at all times. A liquidated damage clause in the contract provided that Smart Computers pay $500 to Johnson College for each day that Smart was late responding to a service call. On October 10, Smart was notified that Johnson College's computer system failed. Smart, however, did not respond to the college's request until October 15. If Johnson College sues Smart Computer Services under the liquidated damages provision of the contract, Johnson College will

• A) win, unless the liquidated damage provision was determined to be a penalty.
• B) win because, regardless of the circumstances, the liquidated damages provision is valid.
• C) lose, because Smart's breach is only a minor.
• D) lose, because the liquidated damages clause in the Smart/Johnson College contract was against public policy.

Analyze loan repayment schedules, including the calculation of remaining loan balances after a certain period of repayments.

Apply the principles of compound interest to evaluate and compare the outcomes of investments with different rates and compounding frequencies.

Calculate the amount borrowed for a loan based on given repayment terms and interest rates.

Use financial formulas to calculate the future value of retirement savings plans and other long-term investment plans.

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Definitions:

LPT Scheduling Rule

A priority rule used in scheduling where jobs are ordered in descending order of their processing times.

Due Date

The specified date by which a task or project is expected to be completed or a payment is due.

Johnson's Rule

A sequencing rule used in operations management for minimizing job completion time by ordering tasks based on the shortest processing times at two workstations.

Optimal Sequence

The most efficient or effective order in which a series of tasks, events, or activities should be completed to achieve the best outcome.