Fraud Examination
Fraud Examination
5th Edition
ISBN: 9781305079144
Author: W. Steve Albrecht, Chad O. Albrecht, Conan C. Albrecht, Mark F. Zimbelman
Publisher: Cengage Learning
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Chapter 4, Problem 11SC
To determine

Whether a person with poor financial condition commit fraud. Why and how employee assistance programs help such person?

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13. Moreon the time value of money The time value of money concept can be applied in various situations and is a fundamental concept underlying other financial concepts. Consider the following example of the application of this concept. Charles is a divorce attorney who practices law in New York City. He wants to join the American Divorce Lawyers Association (ADLA), a professional organization for divorce attorneys. The membership dues for the ADLA are $550 per year and must be paid at the beginning of each year. For instance, membership dues for the first year are paid today, and dues for the second year are payable one year from today. However, the ADLA also has an option for members to buy a lifetime membership today for $5,000 and never have to pay annual membership dues. Obviously, the lifetime membership isn’t a good deal if you only remain a member for a couple of years, but if you remain a member for 40 years, it’s a great deal. Suppose that the appropriate annual…
QUESTION 1 Marina had an accident with her car and the repair bill came to $900.  She didn't have any emergency fund money and no extra money in her monthly budget, so she ended up borrowing from a pay-day loan company.  As long as she can pay the loan back at the end of the 30 day period she won't be charged any interest, technically.  However, she did have to pay an $19 processing fee per $100 that she borrowed.  If she were to consider the processing fee to represent interest paid in her formula, what would she discover to be the annual interest rate she was charged on her short term loan? QUESTION 2 The end of the month has arrived and Marina was only able to save up a portion of the money she owed so far.  This means she will have to delay paying off on the remaining amount.  Besides the delayed payment fee that she is charged, she will now have to pay interest on the remaining amount until it is paid off.  The APR (annual percentage rate) is 46.5%, but the interest is…
E4 Martin had a successful small business before a recession hit his community. Martin believes the economy will improve in the next year and he may be able to regain a sig-nificant portion of the revenue he lost during the past few years. Martin’s business owes a substantial amount of money on a commercial loan to Quick Repo Bank. He also is three months behind on his home mortgage. Finally, he has been paying for most of his groceries and other personal expenses by using a credit card. Martin knows he will have to file bankruptcy in the next two months. What type of bankruptcy proceeding should Martin file and why?   Roselyn Motor Corporation has filed a Chapter 11 bankruptcy. The day before it filed their bankruptcy petition, Roselyn made the following payments: (1) $134,000 in employee salaries, (2) $40,000 to Roselyn’s main supplier Auto Parts Supplier, and (3) $1,200 for a utility bill. Roselyn also transferred ownership of a plant to its main customer for a fraction of the…
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