Concept explainers
The Carlson Department Store suffered heavy damage when a hurricane struck on August 31. The store was closed for four months (September through December), and Carlson is now involved in a dispute with its insurance company about the amount of lost sales during the time the store was closed. Two key issues must be resolved: (1) the amount of sales Carlson would have made if the hurricane had not struck and (2) whether Carlson is entitled to any compensation for excess sales due to increased business activity after the storm. More than $8 billion in federal disaster relief and insurance money came into the county, resulting in increased sales at department stores and numerous other businesses.
Table 17.26 gives Carlson’s sales data for the 48 months preceding the storm. Table 17.27 reports total sales for the 48 months preceding the storm for all department stores in the county, as well as the total sales in the county for the four months the Carlson Department Store was closed. Carlson’s managers asked you to analyze these data and develop estimates of the lost sales at the Carlson Department Store for the months of September through December. They also asked you to determine whether a case can be made for excess storm-related sales during the same period. If such a case can be made, Carlson is entitled to compensation for excess sales it would have earned in addition to ordinary sales.
TABLE 17.26 SALES FOR CARLSON DEPARTMENT STORE ($MILLIONS)
Managerial Report
Prepare a report for the managers of the Carlson Department Store that summarizes your findings, forecasts, and recommendations. Include the following:
- 1. An estimate of sales for Carlson Department Store had there been no hurricane.
- 2. An estimate of countywide department store sales had there been no hurricane.
- 3. An estimate of lost sales for the Carlson Department Store for September through December.
TABLE 17.27 DEPARTMENT STORE SALES FOR THE COUNTY ($MILLIONS)
Trending nowThis is a popular solution!
Chapter 17 Solutions
Modern Business Statistics with Microsoft Office Excel (with XLSTAT Education Edition Printed Access Card) (MindTap Course List)
- Bruce had a disagreement with a new federal agency set up to give additional funds for college to individuals with an aptitude for math. After a hearing, the agency determined that Bruce had no aptitude for math and that he would not receive any funding. Bruce, however, was not discouraged. He told his friend Laura, who just graduated from law school, that he would simply appeal the decision to federal court, have the judge do a fresh review, and provide additional information to the judge regarding his math aptitude that the agency did not have. He feels certain that he will win at the federal court level. Assuming the decision by the administrative agency was a factual finding, what should Laura tell Bruce regarding the standard of review the administrative agency will likely apply?That the agency will likely apply a de novo, or new, review.That the agency will likely apply an arbitrary and capricious standard in any review.That the agency will likely apply a substantial evidence…arrow_forwardBrody’s gross monthly salary amounts to ₱34,600.00 per month subject to the following deductions: SSS contribution - ₱481.30, PhilHealth contribution - ₱212.50, PAG-IBIG contribution - ₱120.00. His withholding tax is ₱3,905.80 per month. Furthermore, he is married with two dependents under his name b. Determine his income tax due at the end of the year and his income tax payablearrow_forwardAt the Acme Cement Company, employeescontribute to a welfare fund at the rate of 4% ofthe first $1000 earned, 3% of the next $1000,2% of the next $1000, and 1% of any additionalincome. What will Mr. Morris contribute in ayear in which he earns $20,000?arrow_forward
- All of the following are legitimate insurance transactions, EXCEPT: Select one: a. Beneficiary of viatical settlement contract can enforce payment of all benefits b. Person solicits a person to enter into a viatical settlement contract c. Wager on a life d. Policyowner enters a viatical settlement contractarrow_forwardAn assessee depreciated the machinery of his factory by 10% each in the first two years and by 40% in the third year and thereby claimed 21% average depreciation relief from taxation department, but the I.T.O. objected and allowed only 20% Show which of the two is right.arrow_forwardJohn's annual gross income is $87,600, but FICA is deducted from his paycheck, and 23% of his salary is withheld for income taxes (federal, state, and local combined), as well. If his employer pays 60% of the cost of a $2500-per-year health insurance plan, and if health insurance is John's only optional deduction, what is his monthly take-home pay?arrow_forward
- As part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars): Year 1 2 3 4 5 6 Payment 190 215 240 285 315 460 The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 4% annually) and government securities, at prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value=$1000) . Funds not invested in these securities will be placed in savings. Security Current Price Rate (%) Years to Maturity 1 $1055 6.750 3 2 $1000…arrow_forwardAs part of the settlement for a class action lawsuit, Hoxworth Corporation must provide sufficient cash to make the following annual payments (in thousands of dollars): Year 1 2 3 4 5 6 Payment 190 215 240 285 315 460 The annual payments must be made at the beginning of each year. The judge will approve an amount that, along with earnings on its investment, will cover the annual payments. Investment of the funds will be limited to savings (at 4% annually) and government securities, at prices and rates currently quoted in The Wall Street Journal. Hoxworth wants to develop a plan for making the annual payments by investing in the following securities (par value=$1000) . Funds not invested in these securities will be placed in savings. Security Current Price Rate (%) Years to Maturity 1 $1055 6.750 3 2 $1000…arrow_forwardAre revenues independent of the expansion decision?arrow_forward
- The time period during which the invoice is to be paid is called _______. a. None of the options b. Discount period c. Discount rate d. Credit periodarrow_forwardA wife and mother was killed in a vehicle accident and her family has been been given 3 proposals and they need to accept one. Proposal 1.) Pay the family of Allison Boone $300,000 a year for the next 20 years, and $500,000 a year for the remaining 20 years. Proposal 2.) Pay the family a lump sum payment of $5 million today. Propsoal 3.) Pay the family of Allison Boone a relatively small amount of $50,000 a year for the next 40 years but also guarantee them a final payment of $75 million at the end of 40 years. Anwser the following questions! 1.) Assume a discount rate of 6 percent is used, which of the three projects has the highest present value? In analyzing the first proposal, take the present value of the 20 year $300,000 annuity. Then take the present value of the deferred annuity of $500,000 that will run from the 21st through the 40th year. The answer you get for the second annuity will represent the value at the beginning of the 21st year (the same as the end of…arrow_forward
- MATLAB: An Introduction with ApplicationsStatisticsISBN:9781119256830Author:Amos GilatPublisher:John Wiley & Sons IncProbability and Statistics for Engineering and th...StatisticsISBN:9781305251809Author:Jay L. DevorePublisher:Cengage LearningStatistics for The Behavioral Sciences (MindTap C...StatisticsISBN:9781305504912Author:Frederick J Gravetter, Larry B. WallnauPublisher:Cengage Learning
- Elementary Statistics: Picturing the World (7th E...StatisticsISBN:9780134683416Author:Ron Larson, Betsy FarberPublisher:PEARSONThe Basic Practice of StatisticsStatisticsISBN:9781319042578Author:David S. Moore, William I. Notz, Michael A. FlignerPublisher:W. H. FreemanIntroduction to the Practice of StatisticsStatisticsISBN:9781319013387Author:David S. Moore, George P. McCabe, Bruce A. CraigPublisher:W. H. Freeman