Table $5.4$ Mr Lee Is Considering a Capacity Expansion for His Supermarket

question 39

Multiple Choice

Table $5.4$
Mr. Lee is considering a capacity expansion for his supermarket. The annual sales projected for the next five years follow. The current capacity is equivalent to $\$ 300,000$ sales. Assume a 20 percent pretax profit margin.


-Using the information in Table 5.4, if Lee expands the capacity to an equivalent of $360,000 sales now (year 0) , and then expands the capacity to an equivalent of $400,000 sales at the beginning of year 4, how much would pretax cash flow increase in total for all years (years 1 through 5) ?

• A) less than $30,000
• B) more than $30,000 but less than $40,000
• C) more than $40,000 but less than $50,000
• D) more than $50,000

Comprehend the principles of accord and satisfaction in the context of settling debts.

Understand the application of promissory estoppel in agreement enforcement.

Analyze the impact of preexisting duties on the enforceability of new agreements.

Interpret the legal consequences of agreements under statutes of limitations.

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Definitions:

Regulations

Rules or directives made and maintained by an authority to regulate behavior or processes.

Government Accountant

A professional specializing in managing and auditing the financial transactions and practices of government agencies and entities.

Management Accountant

A profession that involves partnering in management decision making, devising planning and performance management systems, and providing expertise in financial reporting and control to assist in formulating and implementing an organization's strategy.

Investing Activities

Transactions involving the acquisition and disposal of long-term assets and other investments not included in cash equivalents.