Millie Mows Her Own Yard to Save Money

question 65

Essay

Millie mows her own yard to save money.Her neighbor Paul,however,hires a lawn service to mow his yard.One day Millie is looking out of the window and sees Paul's lawn service drive up.Surprisingly,they begin to mow her yard,not Paul's yard.Millie thinks that is great and keeps her mouth shut while they mow the yard.Later,she gets a bill.She calls the owner of the lawn service and says that she does not have to pay because there was no contract where she agreed to have her yard mowed.The lawn service says that she is liable for the full amount of its contract.Discuss whether the lawn service is entitled to any recovery and why or why not.

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Definitions:

Aversion To Risk

Risk aversion is the preference to avoid uncertainty.

Cash Balances

The amount of available cash in a company's accounts at any given time, used to meet short-term obligations.

EOQ Model

An inventory management formula that identifies the optimum order quantity to minimize both ordering and holding costs.

Constant Demand

A condition in which the demand for a product or service remains unchanged over a particular period of time.