The following balance sheet items from Fasoli, Inc.are listed for December 31, 2016: Accounts payable Interest payable Accounts receivable Land Accumulated depreciation-buil dings Marketable securities Merchandise inventory Accumulated depreciation-equipment Notes payable, due April 15,2017 Office supplies Notes payable, due December 31,2020 Paid-in capital in excess of par value Buil dings Patents Capital stock, $1 par value Prepaid rent Cash Retained earnings Equipment Sal aries payable Income taxes payable $32,6502,20026,500250,00040,00015,000112,90012,5006,500200251,63075,000150,00045,000200,0003,80060,990113,51084,5007,4007,500
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Required:
Present the current liabilities section (including the total) of a classified balance sheet.
Analyze the implications of ignoring salvage value in capital budgeting decisions.
Determine the applicability of net present value method under varying scenarios.
Examine the treatment of working capital in calculating project profitability and investment required.
Compare and contrast the assumptions underlying the internal rate of return and net present value methods.
Definitions:
Language Acquisition Device
A hypothetical mechanism proposed by Noam Chomsky that suggests humans are born with an innate ability to understand the principles of language.
Nativist Theory
A theory in psychology that suggests that certain skills or abilities are "native" or hard-wired into the brain at birth.
Syntax
The set of rules and principles that dictate the structure of sentences in a language, including word order and sentence formation.
Semantics
The study of meaning in language, including the analysis of the meanings of words, phrases, and sentences.