The Flower Company Is for Sale

question 8

Multiple Choice

The Flower Company is for sale.The anticipated average profits for the next five years of the business have been calculated at $150,000.The business has been valued at $750,000 using the earnings method.The net tangible assets have been appraised at $625,000.Which of the following is TRUE for the Flower Company?

• A)The company is expected to yield a 20% return for the purchaser, and is, therefore, a low risk investment.
• B)The company is expected to yield a 20% return for the purchaser, and goodwill of $125,000 is present.
• C)The company is expected to yield a 24% return for the purchaser, and goodwill of $125,000 is present.
• D)The company is expected to yield a 24% return for the purchaser, and goodwill of $475,000 is present.

Identify the eligibility requirements for filing under various bankruptcy chapters.

Comprehend the process and implications of automatic stay on creditors' actions following a bankruptcy filing.

Understand the role and responsibilities of a bankruptcy trustee in Chapter 7 proceedings.

Distinguish between secured and unsecured creditors' claims in bankruptcy.

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Definitions:

Objective Function

A mathematical function used in optimization to define the goal of the solver, such as minimizing costs or maximizing profits.

Fabricating Department

A specialized part of manufacturing where products are assembled, shaped, or otherwise fabricated from raw materials.

Net Profit

The amount of money left over after all operating expenses, taxes, and costs have been subtracted from total revenue.

Binding Constraint

A limitation or restriction within an optimization problem that holds equality at the optimal solution; it actively influences the solution of the problem.