Chapter 1, Problem 5QAP

The Carlson Department Store suffered heavy damage when a hurricane struck on August 31, 2013. The store was closed for four months (Sept – Dec 2013) and Carlson is now involved in a dispute with its insurance company concerning the amount of lost sales during the time the store was closed. Two key issues must be resolved: The amount of sales Carlson would have made if the hurricane had not struck; and Whether Carlson is entitled to any compensation for excess sales from increased business activity after the storm More than $8 billion in federal disaster relief and insurance money came into the county, resulting in increased sales at department stores and numerous other businesses. The table below shows the sales data for the 48 months preceding the storm. The following table reports total sales for the 48 months preceding the storm for all department stores in the county, as well as the total sales in the county for the four months the Carlson Department Store was closed. Management…

It is now December 31, 2008 (t = 0), and a jury just found in favor of a woman who sued the city for injuries sustained in a January 2007 accident. She requested recovery of lost wages plus $200,000 for pain and suffering plus $80,000 for legal expenses.Her doctor testified that she has been unable to work since the accident and that she will not be able to work in the future. She is now 55, and the jury decided that she would have worked for another 10 years. She was scheduled to have earned $84,000 in 2007. (To simplify this problem, assume that the entire annual salary amount would have been received on December 31, 2007.) Her employer testified that she probably would have received raises of 3% per year. The actual payment will be made on December 31, 2009. The judge stipulated that all dollar amounts are to be adjusted to a present value basis on December 31, 2009, using a 7% annual interest rate and using compound, not simple, interest. Furthermore, he stipulated that the pain…

In 2020, Regina moved across the country from the east coast to the west coast. She was moving because the advertising agency she worked for wanted her to relocate to work with a big new client the company had landed on the west coast. Her company reimbursed $7,500 of moving expenses (her total cost for the move), and her total wages for the year were $110,000 While living on the west coast, she began volunteering for a children's hospital doing public relations for their office. She estimated her time volunteering at the hospital during the year was worth $7,000. She also paid $350 in professional ducs to the American Association of Advertising Agencies the beginning of the year, which was rimbursed by her employer. Determine Regina AG for 2020. a. None of the above. b. $117,500 c. $110.150 d. $110,000 e. $117,150