Richtone Design Group LLC (Richtone) is a New York limited liability company (LLC) that owns the copyright to the Pilates Teacher Training Manual and licenses fitness instructors to teach pilates exercise programs. Live Siri Art, Inc. is a California corporation owned by Siri Galliano. Richtone learned that Live Siri Art and Galliano were selling the pilates manual over a website for profit without permission. They sold several copies of the manual to New York residents, making only about $1,000 in sales in New York from 2000 to 2012. Defendants have no office, property, or bank accounts in New York. Richtone brought a copyright infringement lawsuit against Live Siri Art and Galliano in U.S. district court in New York, alleging that the defendants were subject to personal jurisdiction in New York based on New York’s long-arm statute. The defendants Live Siri Art and Galliano defended, alleging that they were not subject to suit in New York because they were residents of California, that they did not have the requisite minimum contacts with New York to be subject to suit in that state, and that to make them defend the lawsuit in New York violated their due process rights. The defendants made a motion to dismiss the New York lawsuit based on lack of personal jurisdiction. Are the defendants subject to lawsuit in New York? Richtone Design Group, LLC v. Live Art, Inc., 2013 U.S. Dist. Lexis 157781 (United States District Court for the Southern District of New York, 2013)
> Jill Meier is the sole owner of Meier Corp., which provides her only source of income. Jill has always paid herself entirely by drawing dividends from her corporation. A friend suggested that as long as she is earning about what she would have to pay so
> Harvey Redmond is planning a new business that he expects will grow into a large company within a few years. Harvey’s lawyer has advised him that large companies are usually C-type corporations because of stock market considerations, so he’s considering
> A company has been growing rapidly for the last three years. It was profitable before the growth spurt started. Although this year's revenues are almost three times those of three years ago, the firm is now losing money. What's the first thing you woul
> Sussman Industries purchased a drilling machine for $50,000 and paid cash. Sussman expects to use the machine for 10 years after which it will have no value. It will be depreciated straight-line over the ten years. Assume a marginal tax rate of 40% What
> Is limited liability a meaningful concept? Why or why not? And if so, for whom?
> What are the significant financial advantages and disadvantages of the sole proprietorship/ partnership form in comparison with the corporate form?
> How does the activity of investors in financial markets affect the decisions of executives within the firm?
> Discuss the relationship between finance and economics.
> Discuss the differences, similarities, and ties between finance and accounting.
> What is the primary factor that determines the price of securities? Can you think of another factor that might significantly affect how investors value the first factor?
> Separate the following list of assets into real assets and financial assets. What are the distinguishing characteristics of each type of asset? Delivery Truck Factory Building Corporate Bond Inventory Corporate Stock Land Note Receivable Compute
> What is the reasoning behind using the current ratio as a measure of liquidity?
> Financial ratios don't do you much good by themselves. Explain.
> The present format for the statement of cash flows is organized according to operating activities, investing activities, and financing activities. That format has only been in use since the late 1980s. The previous format first listed all sources and t
> Outline the thinking behind ratio analysis in brief, general terms (a few lines; don't go into each ratio individually).
> What are free cash flows? Who is likely to be most interested in them? Why?
> Why don't we calculate the total difference in the equity accounts between the beginning and end of the year and consider that difference as a source or use of cash? Why do we similarly exclude the cash account?
> If a company's cash account increases from the beginning to the end of the year, there's more cash on hand so that must be a source of cash. Yet the cash account is an asset and the first cash flow rule says that an asset increase is a use of cash. Exp
> Financial analysts are generally optimists who believe what they're told. Right or wrong? Explain.
> Where do analysts get financial information about companies? What are their concerns about the information?
> Can A competent financial analyst always correctly assess a firm’s financial health from publicly available information? Explain.
> Can managers affect market value ratios?
> It can be argued that the TIE ratio doesn't make much sense. Why? How would you change the measure to be more meaningful? (Hint: Think in terms of cash flows.)
> Why do people view having too much debt as risky? If you were interested in determining whether a company had too much debt, what measure would you use? Why? How much debt do you think would generally be considered too much?
> You invested $20,000 in the stock of HiFly Inc two years ago. Since then the stock has done very well more than doubling in value. You tried analyze HiFly’s financial statements twice in the last two years, but were confused by several of the detailed
> Discuss the different definitions of debt in ratio analysis.
> A company's terms are net 30 and the ACP is 35 days. Is that cause for alarm? Why or why not?
> Why do we need the quick ratio when we have the current ratio?
> List the main user groups of financial information. What are the reasons for their interest?
> Define the term tax base and discuss common bases. What government units’ tax on each? What are these taxes commonly called?
> What is leverage and how does it work? What is the main concern about using it?
> How are capital and working capital different?
> Do the definitions of current assets and current liabilities suggest a quick way of looking at the firm's ability to meet its financial obligations (pay its bills) over the near term? (Hint: Think in terms of ratios.)
> What are the common misstatements of balance sheet figures and why do they present a problem?
> What is meant by liquidity in financial statements?
> The industry average inventory turnover ratio is 7 and your company's is 15. This could be good or bad news. Explain each possibility. How would you find out whether or not it is bad news?
> Why is EBIT an important line item in the income statement? What does EBIT show us?
> Discuss the purpose of an accounting system and financial statements in terms of the way the system represents a business.
> What is the total effective tax rate?
> Why does a financial professional working outside accounting need a knowledge of accounting principles and methods?
> Explain the reasoning behind tax loss carry backs and carry forwards.
> Why are dividends paid from one corporation to another partially tax exempt?
> What are the tax implications of financing with debt versus equity? If financing with debt is better, why doesn't everyone finance almost entirely with debt?
> Is the corporate tax schedule progressive? Why or why not?
> Why is the tax treatment of capital gains an important financial issue?
> What tax rate is important for investment decisions? Why?
> The term "liquidity" is used in several ways. What does it mean in the context of an asset or liability such as those on the balance sheet? What does it mean when applied to an operating company? What does the similar term "liquidate" mean when applie
> Zurn Pex, Inc. and Zurn Industries, Inc. (Zurn) manufactures and markets a home plumbing system that uses Pex tubing, an alternative to traditional copper water pipes. Pex tubing systems are marketed as easier to install, cheaper, and longer lasting than
> Sandra Primrose, who was 73 years old, was shopping in a Wal-Mart store owned and operated by Wal-Mart Stores, Inc. She picked up a watermelon from a large display stand and as she took several steps around the display to reach her shopping cart, she tri
> In 1909, the state legislature of Illinois enacted a statute called teaexinstructhe Woman’s 10-Hour Law. The law prohibited women who were employed in factories and other manufacturing facilities from working more than 10 hours per day. The law did not
> Jon Summervold purchased a remote-controlled toy watercraft from the Wal-Mart store located in Aberdeen, South Dakota. The plaintiff sued Wal-Mart, Inc. for alleged defective design and failure to warn that arose out of the trauma he suffered when the to
> Raymond P. Wirth signed a pledge agreement that stated that in consideration of his interest in education, and “intending to be legally bound,” he irrevocably pledged and promised to pay Drexel University the sum of $150,000. The pledge agreement provide
> Mighty Morphin’ Power Rangers was a phenomenal success as a television series. The Power Rangers battled to save the universe from all sorts of diabolical plots and bad guys. They were also featured in a profitable line of toys and garments bearing the P
> Loren Vranich, a doctor practicing under the corporate name Family Health Care, P.C., entered into a written employment contract to hire Dennis Winkel. The contract provided for an annual salary, insurance benefits, and other employment benefits. Another
> The Lewiston Lodge of Elks sponsored a golf tournament at the Fairlawn Country Club in Poland, Maine. For promotional purposes, Marcel Motors, an automobile dealership, agreed to give any golfer who shot a hole-in-one a new Dodge automobile. Fliers adver
> Acting on an anonymous tip that a residence was being used to sell drugs, Tucson, Arizona, police officers knocked on the front door of the residence. Rodney Gant opened the door, and the police asked to speak to the owner. Gant identified himself and st
> Detective William Pedraja of the Miami-Dade Police Department received a Crime Stoppers unverified tip that one of the tipper’s neighbors, Joelis Jardines, was growing marijuana in his house. Detective Pedraja and Detective Bartelt and his drug detection
> Elvis Presley, a rock ’n’ roll singer, became a musical icon during a career that spanned more than 20 years, until he died at the age of 42. Many companies and individuals own copyrights to Presley’s songs, lyrics, photographs, movies, and appearances o
> Intel Corporation is a large company that distributes its entire line of products and services under the registered trademark and service mark INTEL. The company also owns numerous marks that incorporate its INTEL marks as a permanent component, such as
> Barbara K. Thompson purchased a Sunbeam brand food hand mixer. The mixer was made by Simatelex, a company located in Hong Kong, China, marketed in the United States by Sunbeam Products, Inc., and purchased by Thompson at a Wal-Mart store. Thompson was fa
> Jolie Glenn placed her 3-year-old daughter, Brittany, in a car with the engine running while it was parked in her garage with the garage door closed. Glenn went back into the house, sat down, and fell asleep. When she awoke, she realized that Brittany wa
> Deborah Daughetee consumed multiple bags of microwave popcorn daily for approximately 5 years. Deborah recalled eating more than 10 different brands of buttered popcorn. After removing a bag of butter-flavored microwave popcorn from the microwave, Debora
> Shortly after 2:00 a.m. one summer night, 12-year-old Denise Colbert and several friends took a motorboat out on Lake Tapps, in Washington. Denise had been drinking. Skier’s Choice, Inc. had manufactured the Moomba brand boat they were using. Denise and
> LaShawna Goodman went to a local Wal-Mart store in Opelika, Alabama, to do some last-minute holiday shopping. She brought along her two young daughters and a telephone she had purchased earlier at Wal-Mart to exchange. She presented the telephone and rec
> Pursuant to enabling statutes, two federal administrative agencies—the Federal Trade Commission (FTC) and the Federal Communications Commission (FCC)—created the national do-not-call registry. The national do-not-call registry is a list that contains the
> Vaccines are biological preparations usually containing an agent that resembles a disease-causing microorganism, which is often administered by needle and which improves immunity to a particular disease. Vaccines are subject to federal premarket approval
> Johnson Controls, Inc. is a Wisconsin company that manufactures building equipment and management systems and distributes its products worldwide through direct sales, contractors, and distributors. Edman Controls, Inc. is a distribution company incorpora
> BMW North America, LLC and Rolls-Royce Motor Cars NA, LLC distribute luxury automobiles, automobile parts, and lifestyle items in the United States. These companies and their parent and affiliate companies own various trademarks bearing the “BMW” and “Ro
> Hertz Corporation is incorporated in the state of Delaware and has its headquarters in the state of New Jersey. Melinda Friend, a California citizen, sued the Hertz Corporation in California state court seeking damages for Hertz’s alleged violation of Ca
> Chanel, Inc. is a corporate entity duly organized under the laws of the state of New York, with its principal place of business in New York City. Chanel is engaged in the business of manufacturing and distributing throughout the world various luxury good
> In 1975, after the war in Vietnam, the U.S. government discontinued draft registration for men in this country. In 1980, after the Soviet Union invaded Afghanistan, President Jimmy Carter asked Congress for funds to reactivate draft registration. Preside
> When the Constitution was ratified by the original colonies in 1788, it delegated to the federal government the exclusive power to regulate commerce with Native American tribes. During the next 100 years, as the colonists migrated westward, the feder
> Two brothers were shot and killed in their Houston home. The police found shotgun shells at the scene of the crime. Witness testimony led the police to consider Genovevo Salinas to be a person of interest. Police found Salinas at his home, where he agree
> Jack Tallas immigrated to the United States from Greece. He lived in Salt Lake City for nearly 70 years, during which time he achieved considerable success in business, primarily as an insurance agent and landlord. Over a period of 14 years, Peter Dement
> Elvis Presley, a singer of great renown and a man of substantial wealth, became engaged to Ginger Alden. He was generous with the Alden family, paying for landscaping the lawn, installing a swimming pool, and making other gifts. When his fiancée’s mother
> Glende Motor Company (Glende), an automobile dealership that sold new cars, leased premises from certain landlords. One day, fire destroyed part of the leased premises, and Glende restored the leasehold premises. The landlords received payment of insuran
> The U.S. Congress directed the Secretary of the Treasury to mint and sell a stated number of specially minted commemorative coins to raise funds to restore and renovate the Statue of Liberty. The U.S. Mint mailed advertising materials to persons, includi
> Wilbert Heikkila listed eight parcels of real property for sale. David McLaughlin submitted written offers to purchase three of the parcels. Three printed purchase agreements were prepared and submitted to Heikkila, with three earnest-money checks from M
> Norma English made an offer to purchase a house owned by Michael and Laurie Montgomery (Montgomery) for $272,000. In her offer, English also proposed to purchase certain personal property— paving stones and a fireplace screen worth a total of $100—from M
> Al and Rosemary Mitchell owned a small secondhand store. The Mitchells attended Alexander’s Auction, where they frequently shopped to obtain merchandise for their business. While at the auction, they purchased a used safe for $50. They were told by the a
> For 6 years, Lee Marvin, an actor, lived with Michelle Marvin. They were not married. At the end of 6 years, Lee Marvin compelled Michelle Marvin to leave his household. He continued to support her for another year but thereafter refused to provide furth
> G. S. Adams Jr., vice president of the Washington Bank & Trust Co., met with Bruce Bickham. An agreement was reached whereby Bickham agreed to do his personal and corporate banking business with the bank, and the bank agreed to loan Bickham money at 7.5
> Selchow & Richter Company (S&R) owns the trademark to the famous board game Scrabble. Mark Landsberg wrote a book on strategy for winning at Scrabble and contracted S&R to request permission to use the Scrabble trademark. In response, S&R requested a cop
> McDonald’s Corporation owns, operates, and franchises fast-food restaurants. Over the years, McDonald’s ran promotional games such as Monopoly Game at McDonald’s, Who Wants to be a Millionaire, and other games where high-value prizes, including vehicles
> The police of the city of Indianapolis, Indiana, began to operate vehicle roadblock checkpoints on Indianapolis roads in an effort to interdict unlawful drugs. Once a car had been stopped, police questioned the driver and passengers and conducted an open
> Government agents suspected that marijuana was being grown in the home of Danny Kyllo, who lived in a triplex building in Florence, Oregon. Indoor marijuana growth typically requires high-intensity lamps. To determine whether an amount of heat was emanat
> William Wheetley, a police officer, was on a routine patrol in his police car with Aldo, a German shepherd dog trained to detect certain narcotics (methamphetamine, marijuana, cocaine, heroin, and ecstasy). Wheetley stopped Clayton Harris’s truck because
> Kentucky undercover police officers set up a controlled buy of cocaine outside an apartment complex. After the deal took place, uniformed police moved in on the suspect. The suspect ran to a breezeway of an apartment building. As the officers arrived in
> One night in 2003, Evan Miller, who was 14 years old, was smoking marijuana with another juvenile and an adult, Cole Cannon, at Cannon’s trailer. When Cannon passed out, Miller stole his wallet, splitting about $300 with the other juvenile. When Miller t
> Bernardo Garcia had served time in jail for methamphetamine (meth) offenses. On release from prison, a person reported to the police that Garcia had brought meth to her and used it with her. Another person told police that Garcia bragged that he could ma
> During a few weeks, Cecilia Gonzalez downloaded more than 1,300 copyrighted songs on her computer using a file-sharing network, and she kept them on her computer until she was caught. BMG Music, which owns the copyrights on many of the songs she download
> Dodger Productions, Inc. and Dodger Theatricals, Ltd. (Dodger) produced a stage musical called Jersey Boys. The musical is a historical dramatization about the American 1960s rock ’n’ roll singing group called the Four Seasons and the lives of its member
> Kraft Foods Group Brands LLC (Kraft) is a well-known manufacturer of food products sold in more than 15,000 grocery stores located throughout the United States. Many of its packaged cheeses that are sold in outlets are available under Kraft’s trademarked
> James W. Newton Jr. is an accomplished avant-garde jazz composer and flutist. Newton wrote the song “Choir,” a piece for flute and voice that incorporated elements of African American gospel music. Newton owns the copyright to the composition “Choir.” Th
> Zura Kazhiloti sold jewelry bearing the luxury brand names “Cartier” and “Van Cleef & Arpels” to jewelry stores. The retailers then sold the jewelry through their brick-and-mortar stores, through websites, and through the internet auction site eBay. The
> Bernard Bilski and Rand Warsaw filed a patent application with the U.S. Patent and Trademark Office (PTO). The application sought patent protection for a claimed invention that explains how buyers and sellers of commodities in the energy market can hedge
> Intex Recreation Corporation designed and sold the Extreme Sno-Tube II. This snow tube is ridden by a user down snow-covered hills and can reach speeds of 30 miles per hour. The snow tube has no steering device, and therefore a rider may end up spinning
> Taser International, Inc. manufactures a product commonly known as a “taser.” Tasers have prongs or cords that emit high-voltage electrical currents that when they touch a person’s body, immobilize the person. Tasers are often used by police forces to su
> Dwayne Maddox and his wife, Amanda, were driving home on a highway in their Nissan Pathfinder SUV. Dwayne, who was driving the vehicle, weighed 170 pounds, and Amanda, who was sitting in the passenger seat, weighed 240 pounds. Amanda had previously had a
> Western Manufacturing, Incorporated manufactures a mobile pump for the commercial application of stucco to buildings. The pump consists of a diesel engine, a mixer for the stucco, a batch hopper, a pumping mechanism, and a hose, all mounted on a two-whee
