Deirdre Read That Bids Were Being Solicited for the Construction

question 18

Essay

Deirdre read that bids were being solicited for the construction of an apartment tower. Deirdre submitted the lowest bid and was offered the contract contingent on her providing acceptable sureties in the amount of $1 million. Because Deirdre never had done work on this scale, it was virtually impossible for her to obtain the appropriate sureties. She convinced Reassuring Sureties, Inc. to issue the necessary commitment by misrepresenting that she was a famous builder in Canada. As the work progressed, it seemed to be going well and Deirdre was asked to make the project 52 stories instead of 50 stories, which was the original contract height. She agreed to this change.?After the work was completed, many breaches of contract on the part of Deirdre became evident. Reassuring Sureties was sued for a $500,000 loss. Reassuring Sureties defended on the grounds of fraud and material change in the contract. Decide.

Grasp the concepts of capital structure and how financing decisions impact company risk.

Recognize the importance of efficiency in utilizing assets to generate revenue.

Understand the calculation and implications of working capital.

Identify the various stakeholders and their interests in financial statement analysis.

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Definitions:

Yield Point

The stress at which a material begins to deform permanently, marking the end of elastic behavior and the beginning of plastic behavior.

Clamping Pressure

The force applied by a device to hold or secure objects tightly together, preventing movement or separation.

Allen Wrench

Hex-shaped wrenches designed to fit into recessed hex Allen screws.

Hex Drive

A tool or fastener interface characterized by a six-sided shape, commonly used for screws and bolts.