Answer:
5.84
Explanation:
The formula for inventory turnover is
= Cost of goods sold / Inventory
However, we need to calculate first sales, using PDP equation, which is given as;
PDP = Receivables / [ Cost of goods sold / 365 ],
Alternatively,
Cost of goods sold =
365 [Payables] / DSO
Where ;
Payable = $100m
DSO = 50 days
Inventory = $125m
= (365 * $100) / 50
= $730m
Recall inventory turnover = Cost of goods sold / Inventory
= $730m / $125m
= 5.84
If testing cannot be completed any earlier than four days after the prototype has been built, what type of lag exists?
A. Start to Finish
B. Start to Start
C. Finish to Start
D. Finish to Finish
E. Any of these could be correct.
Answer: finish to finish
Explanation:
A lag is minimum amount of time that is required for a dependent activity have to be delayed to either start or end.
If testing cannot be completed any earlier than four days after the prototype has been built, the type of lag that exists is finish to finish.
Suppose the Digby company shifts focus to only competing in the Thrift and Nano segments, while competing on price by reducing costs and passing the savings to the customers, what strategy would they be implementing? Select: 1Save Answer Broad cost leader Niche differentiation Niche cost leader Broad differentiation
Answer:
Niche cost leader
Explanation:
Since in the question it is mentioned that the Digby company shifts the focus to the segments of Thrift and Nano while on the other hand it also decreasing the cost so here the niche cost leader should be considered as it is focused on the specific segment also it concentrate on the price reduction i.e less the price charged by the competitor in order to gain the competitive advantage
hence, the second last option is correct
Powers Company reported net sales of $1,320,000, average Accounts Receivable, net of $66,500, and net income of $56,125. The accounts receivable turnover ratio is
Answer:
19.85 times
Explanation:
The accounts receivable turnover ratio is Net sales / Average accounts receivables
Given that net sales = $1,320,000
Average accounts receivables = $66,500
Accounts receivable turnover ratio = $1,320,000 / $66,500
= 19.85 times
The interest rate by corporations to evaluate the attractiveness of economic alternatives is known as the
Answer: Weighted Average Cost of Capital
Explanation:
The Weighted Average Cost of capital for a company refers to rate a company pays on the various capital methods it employs to fund its operations such as common and preferred stock as well as debt.
This rate is used to evaluate the attractiveness of economic ventures and projects because the company needs the rate of return on the project to be at least higher than the company WACC so that the company may be able to pay off its capital holders.
How much manufacturing overhead was incurred during the year? Is manufacturing overhead underallocated or overallocated at the end of the year? By how much?
Answer:
1. Overhead incurred during the year;
= Depreciation on manufacturing plant and equipment + Property taxes on plant + Plant Janitors wages
= 485,000 + 19,000 + 9,500
= $513,500
2. The under or over allocation depends on how much manufacturing overhead was allocated to jobs for the year.
= Actual machine hours * Overhead rate
Overhead rate = Manufacturing overhead cost / Allocated Machine hours
= 570,000 / 71,250
= $8
Allocated Manufacturing Overhead = 57,000 * 8
= $456,000
The allocated manufacturing overhead is more than the actual overhead. This means that it is Underallocated and the company did not budget enough for the overheads.
Underallocation = 513,500 - 456,000
= $57,500
A non-regulatory trading halt has been initiated on the NYSE due to an order imbalance. Which statement is TRUE
Answer: B. Other markets in the U.S. may still trade XYZ stock
Explanation:
A Non-regulatory trading halt is one that occurs due to a 7% drop in the S&P 500 Index. When this happens, all stock markets in the US are to halt trade.
This is very theoretical however because in reality, when this happens, traders can simply trade on other markets in the US including regional exchanges, Third Market Makers and Electronic Communication Networks.
An industry experiences a technological advance that improves productivity. This change will result in a(n):
Answer:
decrease in marginal cost for firms in the industry and an increase in the industry supply curve
Explanation:
Supply is the ability of suppliers to produce goods to meet demand for that good at a particular period in time.
There will be an increase in demand when procedures for production are more efficient and when cost reduces.
In this case where there is a technological advance that improves productivity, the suppliers will be able to produce more goods at less cost.
So marginal cost will decrease because of the improved technology and supply will increase because of more efficient process of production.
Consider the effect of business cycles on bondholders versus stockholders. We expect that business cycles will affect:
Answer:
stockholders more since they are residual claimants
Explanation:
We expect that business cycles will affect stockholders more since they are residual claimants. Meaning that they receive their claims only after the more important precedent agents' make their claims. This is because a stockholder legally owns one or more parts (shares) of a specific company and therefore also inherits the risks of the company and are the last to be able to recover their money if the company crashes.
A business has developed a product, but is unsure where to focus its efforts to sell the product. Marketing can help this company by:
Answer:
Identifying the potential customer.
Explanation:
Identifying the potential customer is the right answer because a business requires customers to sell their product and the success of its product is directly related to the demand made by customers. Therefore, marketing is a process or technique that helps to find the area where the potential customer exists. So, after finding the segment of potential customers a company may focus to sell its product.
34. Northwest Lumber had a profit margin of 5.25%, a total assets turnover of 1.5, and an equity multiplier of 1.8. What was the firm's ROE?
Answer:
14.18%
Explanation:
Calculation for the Return on Equity
Using this formula
Return on equity = Profit margin×Totyal assets turnover × Equity multiplier
Let plug in the formula
Return on equity = 5.25 × 1.5 × 1.8
Return on equity = 14.18%
Therefore the Return on equity will be 14.18%
The main problem with relying on contracts to reduce opportunistic behavior by alliance partners is that a) in cross-border alliances, the contracts are often not enforceable due to differences in legal systems. b) contracts create motivations for rule-evading behavior. c) contracts are ignored by opportunistic firms because the cost of enforcing the contract is too great for the other partner. d) it is impossible to specify all opportunistic actions by an alliance partner.
Answer: d. it is impossible to specify all opportunistic actions by an alliance partner
Explanation:
A strategic alliance is simply an agreement that takes place between two or more parties in order to pursue a certain goal even though they still remain independent organizations.
The main problem with relying on contracts to reduce opportunistic behavior by alliance partners is that it is
impossible to specify all opportunistic actions by an alliance partner.
Seller Wanda told her broker Chad that she wants to clear $75,000.00 when she sells her home. Chad took the listing and sold the home for $150,000. He gave Wanda her $75,000.00 and he kept the other $75,000.00 Which of the following is a true statement? A) Chad should have advised Wanda that she could clear more on the sale of her home. B) Chad’s commission is more than the State Realtors’ Board allows on one sale. C) Chad took an illegal listing. D) Chad had a duty to Wanda to market and sell her home for the highest price?
Answer: Chad took an illegal listing
Explanation:
From the question, we are informed that Seller Wanda told her broker Chad that she wants to clear $75,000.00 when she sells her home and that Chad took the listing and sold the home for $150,000 and gave Wanda her $75,000.00 and he kept the other $75,000.00.
In this scenario, Chad took an illegal listing. Wanda has the right to know the amount that the home was sold. All written offers should have been sent to Wanda for her to review.
Table: Marginal Analysis of Sweatshirt Production II:
Quantity of shirts Total Benefit (in dollars) Total Cost (in dollars)
0 $0 $0
1 16 9
2 32 20
3 48 33
4 64 48
5 80 65
Given the information above, the optimal quantity of sweatshirts that will be produced is. [Hint: Find out the MB and MC.]
a) 2
b) 3
c) 4
d) 5
Answer:
Optimal qauntity is 4 Units
Explanation:
Here, we have to decide quantity of production at which maximum profit can be generated. For this reason we will have to contruct a table which will help us to calculate Marginal Benefit and Marginal cost. This table is given as under:
Quantity Total benefit Marginal benefit Total Cost Marginal Cost
0 Units 0 0 0 0
1 Units 16 16 9 9
2 Units 32 16 20 11
3 Units 48 16 33 13
4 Units 64 16 48 15
5 Units 80 16 65 17
We can see that at 4 Units, marginal revenue is almost equal to marginal cost. At this level of production, we have maximum benefits generated which is:
Maximum Benefit Generated = ($16 - $9) + ($16 - $11) + ($16 - $13) + ($16 - $15) = $7 + $5 + $3 + $1 = $16 for 4 Units
We can also cross check by considering 5 units case to assess whether the benefit generated is more than 4 units case or not.
Maximum Benefit Generated (For 5 Units) = ($16 - $9) + ($16 - $11) + ($16 - $13) + ($16 - $15) + ($16 - $17) = $7 + $5 + $3 + $1 - $1 = $15 for 4 Units
As the maximum benefit generated in the case of 4 units is more because of using marginal revenue = Marginal Cost relation, hence the optimal quantity is 4 units.
Which of the following could most likely have prevented the accounting scandals of the early 2000s and the global financial crisis?
A. Adopting a narrow shareholder perspective
B. Separating economic interests and social needs
C. Practicing effective corporate governance
D. Adopting the principles of shareholder capitalism
Answer:
C. Practicing effective corporate governance
Explanation:
Accounting scandals refer to the scandals of the business that occurs from the change in the financial statements that to be done in a deliberate manner also the disclosing information is misled. It involves an organization as a whole.
In order to prevent the accounting scandals and the global financial crisis it could practicing corporate governance in an effective manner
Hence, the correct option is C.
_____ tend to move in anticipation of the business cycle, turning up in anticipation of recovery and turning down at signs of economic weakness.
Answer:
Price of Capital goods
Explanation:
The prices of capital good increases in anticipation of an economic boom and falls faster when approaching economic fall. Consumer goods are immune to economic cycles. Financial stock movement does not have any clear patterns with economic cycles.
WILL GIVE BRAINLIEST!! Connections Acadamy - Intro Entrepreneurship
1. Using what you learned in the Unit, what are some of the characteristics about Happier Camper that qualify it as a small business? Discuss the pros and cons of Happier Camper being and/or remaining a small business . 2. Discuss what sets the Happier Camper apart from other similar businesses (hint: explain how the design of the Happier Camper makes the product unique) . 3. Explain why the show’s host described the Happier Camper as a “Happy Accident”. 4.Explain what is unique about how Sophia Hall generates inventory for her store. Why do you think Hall’s store is successful and what about the model do you think makes it sustainable? 5. After interviewing both business owners, the host asks them to provide one word that describes what they think is needed to making it in business. Choose one of the words that Michael or Hall used and explain why you think this word best answers the question or provide your own word that you believe is most needed to make it in business. 6. Both Michael and Hall own their own small, successful businesses. Research a small, successful business near you and write a short two paragraph article discussing the business and reporting on why you think the business has or has not been successful. 7. Finally, include possible next steps for the business in the future.intro entrepreneurship connection
Answer:
Using what you learned in the Unit, what are some of the characteristics about Happier Camper that qualify it as a small business? Discuss the pros and cons of Happier Camper being and/or remaining a small business.
Pros : The owners can take more time with their products and make sure that they are in order. They have more time to fix problems they have because the demand for their products isn’t very big.
Cons : They don’t have many employees because they can’t afford them. They are behind on their orders by 2 months so that shows they need more employees for the extra help but they can’t get them.
Discuss what sets the Happier Camper apart from other similar businesses (hint: explain how the design of the Happier Camper makes the product unique).
They use a more retro/vintage design that is very appealing to lots of adults and teenagers. That is what pulls the customers in because it is interesting and cool so people spread the word about it.
Explain why the show’s host described the Happier Camper as a “Happy Accident”.
It is described as a “Happy Accident” because the owner had absolutely no intention of starting a business from it. He hadn’t planned on going commercial with his trailers until one day someone wanted to rent his trailer for a weekend. This person spread the word about how great the trailer was and so more people wanted to rent them. Eventually, he decided to make more trailers, rent them out, and eventually sell them for thousands of dollars.
Explain what is unique about how Sophia Hall generates inventory for her store.
Sophia partners herself with the local people in the community that make little homemade goods to put up for sale in her shop. She exchanges the goods for work.
Why do you think Hall’s store is successful and what about the model do you think makes it sustainable?
I believe that it will be successful because it is a local store that a ton of the towns people come to. People love handcrafted goods and that is what her store is full of. She finds products that also come with partners so she will always have goods to sell.
After interviewing both business owners, the host asks them to provide one word that describes what they think is needed to make it in business. Choose one of the words that Michael or Hall used and explain why you think this word best answers the question or provide your own word that you believe is most needed to make it in business.
As good as the words that both Michael and Hall used, I would definitely use the word devotion. Devotion means loyalty, love, or enthusiasm for a person, activity, or cause. This word describes what it takes to make it successfully in a business. It takes love, loyalty, and a lot of enthusiasm for a business to fly through the roof. You have to be devoted to your business because in the end, you won’t really go anywhere with a business unless your mind and heart are in it.
Both Michael and Hall own their own small, successful businesses. Research a small, successful business near you and write a short two paragraph article discussing the business and reporting on why you think the business has or has not been successful. Finally, include possible next steps for the business in the future.
Explanation:
Fee simple ownership, shared walls, and a fractional interest in common areas are all characteristics of
Answer: Townhouses
Explanation;
Townhouses are fee-simple which means that the owner of a townhouse owns the land and everything in it. It gives the broadest ownership rights available.
As Townhouses are a mix between a Condominium and a typical Single-Family house, they also have shared walls and a fractional interest in common areas such as parking lots.
On November 21, 2021, a fire at Hodge Company's warehouse caused severe damage to its entire inventory of Product Tex. Hodge estimates that all usable damaged goods can be sold for $28,000. The following information was available from the records of Hodge's periodic Inventory system: Inventory, November 1 Net purchases from November 1, to the date of the fire Net sales from November 1, to the date of the fire $180,000 156,000 236,000 Based on recent history, Hodge's gross profit ratio on Product Tex is 30% of net sales.
Required:
Calculate the estimated loss on the inventory from the fire, using the gross profit method.
Answer:
$142,800
Explanation:
Calculation for the estimated loss on the inventory from the fire, using the gross profit method.
First step is to find the Cost of Goods available for sale
Cost of Goods available for sale = $180,000+$156,000
Cost of Goods available for sale= $336,000
Second step is to find the cost of Goods Sold
Cost of Goods Sold = $236,000 - 30%
Cost of Goods Sold = $165,200
Third step is to find the Cost of Goods Sold
Cost of ending inventory = $336,000 - $165,200
Cost of Goods Sold = $170,800
Last step is to calculate the Estimated loss from fire using this formula
Estimated loss from fire= Cost of Goods Sold - Estimated usable damaged goods
Let plug in the formula
Estimated loss from fire= $170,800 - $28,000
Estimated loss from fire= $142,800
Therefore the estimated loss on the inventory from the fire, using the gross profit method will be $142,800
3) What is the coupon payment of a 15-year $10,000 bond with a 9% coupon rate with semiannual payments
Answer:
$450
Explanation:
The computation of coupon payment is shown below:-
Semiannual coupon payment amount = Future value × Coupon rate ÷ Coupon payments in a year
Where
Future value = $10,000
Coupon rate = 9%
Coupon payment in a year = 2
Now place the values to the above formula
So, the coupon payment is
= $10,000 × 9% ÷ 2
= $450
Therefore for computing the coupon payment we simply applied the above formula.
Evaluating and rewarding managers based on absorption basis income can lead to overproduction. true or false
Answer:
True
Explanation:
The absorption basis of income, profits are always high when the production is greater than income because more fixed costs will have been deferred in closing inventory.
So, managers will focus more on increasing production which create huge balances of closing stocks and consequently results in large profits.
Which of the following is not a concern regarding IFRS adoption by the U.S.?a. Need for the U.S. to have strong influence on the standard-setting process and ensure that standards meet U.S. needs.b. Geographic dispersion of standard setters make it unlikely that boards can interact to achieve consensus.c. The high costs to companies of converting to IFRS.d. The fact that many laws, regulations and private contracts reference U.S. GAAP.
Answer: Geographic dispersion of standard setters make it unlikely that boards can interact to achieve consensus.
Explanation:
The concern regarding IFRS adoption by the U.S are the need for the U.S. to have strong influence on the standard-setting process and ensure that standards meet U.S. needs, the high costs to companies of converting to IFRS and the fact that many laws, regulations and private contracts reference U.S. GAAP.
It should be noted that "geographic dispersion of standard setters make it unlikely that boards can interact to achieve consensus" isn't a source of concern.
Therefore, Option B is the answer.
A machine originally had an estimated useful life of 6 years, but after 4 complete years, it was decided that the original estimate of useful life should have been 10 years. At that point the remaining cost to be depreciated should be allocated over the remaining:_________.
a. 16 years
b. 4 years
c. 10 years
d. 6 years
Answer:
d. 6 years
Explanation:
Depreciation is the loss of value of an asset over a period of time. The asset has a useful life period after which it is referred to as scrap.
The value of the asset after it's useful life is called the salvage value.
Useful life of an asset is estimated and deductions in its value are made till the useful life is exhausted.
In this scenario the useful life was initially taken to be 6 years.
After 4 years it was realised a mistake wasade and useful life is supposed to be 10 years
Since useful life of the asset remains contstant, the remaining years of useful life is the real estimate of useful life less years already used.
Remaining useful life = 10 - 4 = 6 years
According to globalization opponents, what has increased in wealthy advanced economies as a result of globalization
Answer: A. unemployment
Explanation:
Globalization opponents in developed countries believe that unemployment has increased in developed countries due to globalization.
They point to the importation of goods and services at a cheaper rate than would have been produced in the developed country thereby causing factories and firms that produce said goods and services to either reduce their workforce or close down to avoid making losses.
Some companies such as Nike also preferred to outsource their production to developing areas like South-east Asia to reduce labor costs. These were jobs that opponents of globalization believe would have remained in developed countries if not for globalization.
Suppose the information below is from the 2022 financial statements and accompanying notes of The Scotts Company, a major manufacturer of lawn-care products. (in millions) 2022 2021 Accounts receivable $270.4 $259.7 Allowance for uncollectible accounts 10.6 11.4 Sales revenue 2,981.8 2,871.8 Total current assets 1,044.9 999.3Note 19. Concentrations of Credit Risk Financial instruments which potentially subject the Company to concentration of credit risk con- sist principally of trade accounts receivable. The Company sells its consumer products to a wide variety of retailers, including mass merchandisers, home centers, independent hardware stores, nurseries, garden outlets, warehouse clubs, food and drug stores and local and regional chains. Professional products are sold to commercial nurseries, greenhouses, landscape services and growers of specialty agriculture crops. Concentrations of accounts receivable at September 30, net of accounts receivable pledged under the terms of the New MARP Agreement whereby the pur- chaser has assumed the risk associated with the debtor's financial inability to pay ($146.6 million and $149.5 million for 2022 and 2021, respectively), were as follows. 2021 2022 Due from customers geographically located in North America 53% 52%Applicable to the consumer business 61% 54%Applicable to Scotts LawnService", the professional businesses (primarily distributors), Smith & Hawken and Morning Song 39% 46%Top 3 customers within consumer business as a percent of total consumer accounts receivable 0% 0% The remainder of the Company's accounts receivable at September 30, 2022 and 2021, were generated from customers located outside of North America, primary retailers, distribu- tors, nurseries and growers in Europe. No concentrations of customers or individual customers within this group account for more than 10% of the Company's accounts receivable at either balance sheet date. The Company's three largest customers are reported within the Global Consumer segment, and are the only customers that individually represent more than 10% of reported consolidated net sales for each of the last three fiscal years. These three customers accounted for the following percentages of consolidated net sales for the fiscal years ended September 30:________. Largest 2nd Largest 3rd Largest Customer Customer Customer 2022 21.0% 13.5% 13.4% 2021 20.2% 10.9% 10.2% 2020 21.5% 11.2% 10.5%Calculate the accounts receivable turnover and average collection period for 2022 for the company. (Round answers to 1 decimal places, e.g. 15.2. Use 365 days for calculation.)Accounts receivable turnover enter the accounts receivable turnover rounded to 1 decimal place timesAverage collection period enter the average collection period rounded to 1 decimal place days
Answer:
Accounts Receivable Turnover= 11.7 times
Average collection period = 31.2 days
Explanation:
Calculation for the accounts receivable turnover and average collection period for 2022 for the company.
A. Computation for accounts receivable turnover
Using this formula
Accounts Receivable Turnover = Sales revenue/Net accounts receivable
Let plug in the formula
Accounts Receivable Turnover= 2,981.8/254.05
Accounts Receivable Turnover= 11.7 times
B. Computation for average collection period
Using this formula
Average collection period = 365/Accounts Receivable Turnover
Let plug in the formula
Average collection period = 365/11.7
Average collection period = 31.2 days
Therefore Accounts Receivable Turnover will be 11.7 times while the Average collection period will be 31.2 days
The major levels of intensity at which a company can choose to distribute its products are __________ distribution.
Answer:
Exclusive, selective, intensive
Explanation:
When a company markets its products it needs to choose carefully how it will distribute its products most effectively.
There is need for consideration of the cost and benefit associated with a level of distribution intensity because each one has associated cost like number of salespeople to drive the process.
There are 3 levels of intensity for distributing products
- Intensive or mass coverage is when products are distributed widely in all locations where product is sold. It is ideal for low priced goods that have a high demand.
- Selective coverage is when sales are limited to locations where clients are most concentrated.
- Exclusive coverage is for higher end products targeted at a narrow market.
Managers get things done through other people. They make decisions, _______________, and direct the activities of others to attain goals.
Answer:
allocate resources
Explanation:
According to the given scenario, the Manager has an important role in any organization as he needs to distribute the work among the employees.
The Manager has major responsibility is to make decisions for the benefit of the organization, allocation of resources so that work should be done in an efficient manner without any barrier and the activities that should be directed to meet the targets.
What situations would indicate that an increase in turnover might be just what an organization needs?
Answer:
Explanation:
In the context of Human Resources, turnover refers to the number of workers who leave the organization. A scenario where an increase is what is needed the most would be if the current employees are unable to efficiently and effectively complete their work and are costing the company more money than they are producing in sales. Therefore, if those employees leave the company will save money on them and can hire newer employees that may perform much more efficiently.
Phoenix Agency leases office space for $7,700 per month. On January 3, Phoenix incurs $105,600 to improve the leased office space. These improvements are expected to yield benefits for 10 years. Phoenix has 8 years remaining on its lease. Compute the amount of expense that should be recorded the first year related to the improvements. a) $7,700 b) $20,900 c) $18,260 d) $10.560
Answer:
$13,200 per year
Explanation:
Amount incurred to improve the office space = $
Improvement expected to yield benefit = 10 years
Remaining life on it's lease = 8 years
Since the office space is not going to remain with Phoenix after the lease period, it means that the improvement expenses will be expensed over the remaining lease period I.e 8 years.
Therefore, the amount of expense that should be recorded the first year related to improvements can be calculated as;
= Amount incurred to improve the office space ÷ remaining life on its lease
= $105,600 ÷ 8
= $13,200 per year
Suppose that you can sell as much of a product (in integer units) as you like at $60 per unit. Your marginal cost (MC) for producing the qth unit is given by: MC=7q This means that each unit costs more to produce than the previous one (e.g., the first unit costs 7*1, the second unit (by itself) costs 7*2, etc.). If fixed costs are $80, what is the profit at the optimal integer output level?
Answer:
Profit at the optimal integer output level is $176.50.
Explanation:
This can be determined as follows:
Step 1: Calculation of optimal integer output level
At the optimal integer output level, profit is maximized where marginal revenue (MR) is equal to the marginal cost (MC), i.e. where;
MR = MC ................................ (1)
For any product, the MR is equal to the price per unit of the product. Therefore, we have:
MR = Price per unit = $60
Also given,
MC = 7q
Substituting for MR and MC in equation (1) and solve for q, we have:
$60 = 7q
q = $60 / 7
q = 9 units
Therefore, the optimal integer output level is 9 units.
Step 2: Calculation of total revenue at optimal integer output level
Total revenue = Price per unit * q = $60 * 9 = $540
Step 3: Calculation of total cost at optimal integer output level
Since MC = 7q, the total cost (C) can be obtained by taking the integral of the MC as follows:
C = ∫(MC)dq = ∫[7q]dq = (7 / 2)q^2 + F = 3.5q^2 + F ........... (2)
Where F is Fixed cost which is given as $80.
We then substitute F = $80 and q = 9 into equation (2) to have:
C = 3.5(9^2) + 80
C = (3.5 * 81) + 80
C = 283.50 + 80
C = $363.50
Therefore, total cost at the optimal integer output level is $363.50.
Step 4: Calculation of profit at optimal integer output level
Profit = Total revenue - Total cost ...................... (3)
Where;
Total revenue = $540; from step 2 above.
Total cost = $363.50; form step 3 above.
Substituting the values into equation (3), we have:
Profit = $540 - $363.50 = $176.50
Therefore, profit at the optimal integer output level is $176.50.
You apply thru email for a job as a mystery shopper and you get the job. Your first assignment: deposit a $3,000 check from your new employer and use $2,500 of the funds to send money using a money transfer service to an account named by the employer; then, evaluate the service. You are told to keep the extra $500 as your fee. Little do you realize, but if you are not careful you are about to lose $2,500 to a fraud. Describe how the fraud is committed and how to prevent this from actually happening to you.
Answer:
The fraudster is basically using forged or fake checks that if they are lucky enough will be paid by the bank. So if you deposit the check (and the fraudster is lucky) in a couple of days you will have $3,000. Then you transfer $2,500 to the fraudster's account and keep $500 as your pay. But what happens when the account owner tells the bank and the police that the check was forged, or stolen, or fake? Then you will be in trouble and will probably end up returning the entire $3,000.
The easiest way to check if this is a scam or not is to report the check to the bank and make them verify if the check is good or not.