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goldenfox [79]
3 years ago
12

Powers drove a truck that his employer leased from Big Trucks. After Big repeatedly failed to respond to Powers' requests to fix

the strap used to close the truck's rear door, Powers replaced the strap with a nylon rope. Later, this nylon rope broke, causing Powers to fall and break his back. When Powers sued Big, what was the result?
Business
1 answer:
Serhud [2]3 years ago
3 0

Answer:

Powers will get compensation from Big Truck for his back injury under the Law of Negligence.

Explanation:

Negligence is a form of tort where although there is no contract between the two parties, yet one party is reasonably expected to excercise duty of care to another party so his or her safety, wellbeings may be upheld.

The principle of Law of Negligence was not created until 1932 following the result of the case Donoghue v Stevenson. In this case, Stevenson was a ginger beer manufacturer and Donoghue was given a bottle of ginger beer, drank half of it before realizing there was ecomposing snail. Donoghue later suffered nervous shock and sued Stevenson. Though there was no contract between Donohue and Stevenson, the Hous of Lords at that time decided Donoghue was legally able to ask Stevenson for damages.

To show that one party is negligent and owe another party damages, there are three things the claimant has to prove: 1. Is there a duty of care?; 2. Does the defendant breach the duty of care?; 3. The suffered damanges is caused due to the breach of duty of care?

Apply to the case Power v Big Trucks, 1. Yes, there is a duty of care owed by Big Trucks to anyone who will drive their rental truck that the truck is of enough safety; 2. Yes, they breach the duty of care because the truck was not safe enough to be driven and they repeatedly ignored notification from Powers about its unsafety; 3. Yes, Had Big Truck fullfilled its duty of care by fixing the strap, Powers would not have fallen and broken his back.

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In 20X5, Elm Corp. bought 10,000 shares of Oil Corp. at a cost of $20,000. On January 15, 20X6, Elm declared a property dividend
xxMikexx [17]

Answer:

c) $25,000

Explanation:

A property dividend should be recorded in retained earnings at the property's  <u>market value at date of declaration.</u>

<u>The date of declaration is the date on which the firm has made the commitment to pay the dividend. The market value on this date is the value that was considered when the board made the decision to distribute a property dividend and thus is the appropriate measure of the sacrifice to the firm. </u>

<u> </u>In application to the scenario, <u>the property dividend will be recorded in retained earnings at the market value at the date of declaration which is Jan 15 </u>NOT on the day it is payable.

Hence, retained earnings will reduce by $25,000

In 20X5, Elm Corp. bought 10,000 shares of Oil Corp. at a cost of $20,000. On January 15, 20X6, Elm declared a property dividend of the Oil stock to shareholders of record on February 1, 20X6, payable on February 15, 20X6. During 20X6, the Oil stock had the following market values:  

January 15

$25,000

February 1

26,000

February 15

24,000

6 0
3 years ago
Simon Company’s year-end balance sheets follow.At December 31 2017 2016 2015Assets Cash $ 36,335 $ 42,472 $ 42,524 Accounts rece
mina [271]

Answer:

(1) Debt Ratio in 2017 = 44.57%; Debt Ratio in 2016 = 39.33%; Equity Ratio in 2017 = 55.43%; and Equity Ratio in 2016 = 60.67%.

(2) Debt-To-Equity Ratio in 2017 = 80.42%; and Debt-To-Equity Ratio in 2016 = 64.83%.

(3) Times Interest Earned in 2017 = 4.71 times; and Times Interest Earned in 2016 = 4.22 times.

Explanation:

(1) Calculation of debt and equity ratios

Debt ratio is a ratio that is used to measure the ability of a company to pay off its liabilities with its assets. Debt ratio can be calculated using the following formula:

Debt Ratio = Total Debt / Total Assets

We can then calculate as follows:

Total debt = Accounts payable + Long-term notes payable secured by mortgages on plant assets

Total debt in 2017 = $159,605 + $120,505 = $280,110

Total debt in 2016 = $89,723 + $123,354 = $213,077

Total assets in 2017 = $628,417

Total assets in 2016 = $541,739

Debt Ratio in 2017 = $280,110 / $628,417 = 0.4457, or 44.57%

Debt Ratio in 2016 = $213,077 / $541,739 = 0.3933, or 39.33%

Equity ratio is a ratio that is used to measure the amount of assets of a company that are financed by the investments of the owners of the company. Equity ratio can be calculated using the following formula:

Equity Ratio = Total Equity / Total Assets

We can then calculate as follows:

Total equity = Common stock, $10 par value + Retained earnings

Total equity in 2017 = $162,500 + $185,807 = $348,307

Total equity in 2016 = $162,500 + $166,162 = $328,662

Equity Ratio in 2017 = 0.5543, or 55.43%

Equity Ratio in 2016 = 0.6067, or 60.67%

(2) Calculation of debt-to-equity ratio.

The debt-equity ratio provides the proportion of financing of a company that is contributed by creditors and investors. Debt-equity ratio can be calculated using the following formula:

Debt-To-Equity Ratio = Total Debt / Total Equity

Using the data in part (1) above, we can then calculate as follows:

Debt-To-Equity Ratio in 2017 = $280,110 / $348,307 = 0.8042, or 80.42%

Debt-To-Equity Ratio in 2016 = $213,077 / $328,662 = 0.6483, or 64.83%

(3) Calculation of times interest earned

The times interest earned ratio is a ratio that is used to determine the proportionate amount of income that that is required to cover interest expenses. The times interest earned ratio can be calculated using the following formula:

Times Interest Earned = Earnings before interest and tax (EBIT) / Interest expenses

We can then calculate as follows:

EBIT = Sales - Cost of goods sold - Other operating expenses

EBIT in 2017 = $816,942 - $498,335 - $253,252 = $65,355

EBIT in 2016 = $644,669 - $419,035 - $163,101 = $62,533

Interest expenses in 2017 = $13,888

Interest expenses in 2016 = $14,827

Times Interest Earned in 2017 = $65,355 / $13,888 = 4.71 times

Times Interest Earned in 2016 = $62,533 / $14,827 = 4.22 times

7 0
3 years ago
Crane incurs a weekly payroll of $251000 that includes federal taxes withheld of $38200, FICA taxes withheld of $23970, and 401(
Salsk061 [2.6K]

Answer:

First let us define the nature of each of the following as per Balance sheet of a company:

Payroll payable- Liability

FICA taxes withheld- Liability

Federal taxes- Liability

410(k)- Liability

Explanation:

Effect of Transaction on assets and liabilities:

  • Payroll expense Debit will have no impact
  • Payroll payable, Federal taxes, FICA and 401(k) will increase the current liability.
  • And when they are subsequently paid, cash will be credited hence decreasing the current assets and all these current liabilities shall be debited, hence decreasing the current liability portion.
8 0
3 years ago
Biochemical Corp. requires $690,000 in financing over the next three years. The firm can borrow the funds for three years at 9.2
viva [34]

Answer:

a. We have:

Interest cost of long-term fixed-rate = $191,475

Interest cost of short-term variable-rate = $192,51

b. Long-term fixed rate plan is less costly

Explanation:

a. Determine the total interest cost under each plan.

Interest cost of long-term fixed-rate = Amount required to be borrowed * Fixed interest rate per year * Number of years = $690,000 * 9.25% * 3 = $191,475

Interest cost of short-term variable-rate = (Amount required to be borrowed * First year interest rate) + (Amount required to be borrowed * Second year interest rate) + (Amount required to be borrowed * Third year interest rate) = ($690,000 * 7.50%) + ($690,000 * 12.15%) + (($690,000 * 8.25%) = $192,510

b. Which plan is less costly?

Since the $191,475 interest cost of long-term fixed-rate is less than $192,510 interest cost of short-term variable-rate, this implies that long-term fixed rate plan is less costly.

3 0
2 years ago
Explain how scarcity relates to the decision you made as the president of the United States.
lions [1.4K]

Because scarcity increases negative emotions, it ends up affecting one's decisions. Socioeconomic scarcity can be caused by depression or anxiety.  A president would be making decisions based on the negativity. But in the U.S.A the government deals with scarcity by implementing quotas on how much people can buy.

Hope this helps,

ROR

3 0
2 years ago
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