1. You are the owner of an automobile tire wholesaler. You agree to sell a container of tires for $10,000 to Regional Auto Repair, Inc. John, a new employee of Regional Auto Repair, offers to pay you with a promissory note worth $40,000 from a business you have not heard of. John claims that he does not have time to enforce the note but assures you that it will be very easy for you to do so. John also inquires whether you would have further transactions by which he could pay you with similar promissory notes. Evaluate whether or not you should accept the promissory note as payment for the tires, particularly in reference to being a holder in due course.

Practical Management Science
6th Edition
ISBN:9781337406659
Author:WINSTON, Wayne L.
Publisher:WINSTON, Wayne L.
Chapter2: Introduction To Spreadsheet Modeling
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1. You are the owner of an automobile tire wholesaler. You agree to sell a container of tires for $10,000 to Regional Auto Repair, Inc.
John, a new employee of Regional Auto Repair, offers to pay you with a promissory note worth $40,000 from a business you have not
heard of. John claims that he does not have time to enforce the note but assures you that it will be very easy for you to do so. John also
inquires whether you would have further transactions by which he could pay you with similar promissory notes. Evaluate whether or
not you should accept the promissory note as payment for the tires, particularly in reference to being a holder in due course.
Transcribed Image Text:1. You are the owner of an automobile tire wholesaler. You agree to sell a container of tires for $10,000 to Regional Auto Repair, Inc. John, a new employee of Regional Auto Repair, offers to pay you with a promissory note worth $40,000 from a business you have not heard of. John claims that he does not have time to enforce the note but assures you that it will be very easy for you to do so. John also inquires whether you would have further transactions by which he could pay you with similar promissory notes. Evaluate whether or not you should accept the promissory note as payment for the tires, particularly in reference to being a holder in due course.
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