The Phar-Mor Fraud Began When Management

question 49

Multiple Choice

The Phar-Mor fraud began when management:

• A)Forgot to change the budgeted figures that had been incorrectly computed.
• B)Attempted to make the actual net income match the budgeted amounts.
• C)Overstated their expenses to cover amounts embezzled from the company.
• D)Understated the revenue in order to reduce the tax payable to the IRS.

Understand the role of loan and savings interest rates on investment decisions.

Determine the present value of endowments and how this influences consumption over time.

Apply the Cobb-Douglas utility function to real-world consumption and saving decisions.

Understand the Cobb-Douglas utility function and how it applies to consumption patterns over time.

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Definitions:

Drawee

The drawee is the party in a financial transaction, usually a bank, upon whom a check or draft is drawn and is responsible for paying the amount specified.

Maker

In financial terms, the party that creates or issues a promissory note, obligating themselves to pay a certain sum to a specified party.

Negotiable Instrument

A document in writing that confirms the payout of a designated amount of money, whether immediately upon demand or at a specific time, with the name of the person paying listed on it.

Negotiable Instrument

A document guaranteeing the payment of a specific amount of money, either on demand or at a set time, with the payer named or to the bearer.