Page 516 - Business Principles and Management

C HAPTER 18 A SSESSMENT

APPLY WHAT YOU KNOW

18. Based on the Reality Check scenario at the beginning of the chapter,
what types of business insurance would you recommend for Sandra?
Divide your recommendations into three categories: (a) must have,
(b) should have, (c) probably doesn’t need. Justify your decisions.
19. Identify several possible future uses for smart cards: (a) for financial
transactions, (b) for other personal uses, (c) for other business uses.
What problems do you anticipate might result for the widespread
use of smart cards carrying a large amount of personal information?
20. Although the use of credit usually leads to increased sales for retail-
ers, when could credit sales actually lead to decreased profits? What
can business owners and managers do to reduce that possibility?
21. If you owned a restaurant in your community how would you try to
identify noninsurable risks that might have a negative effect on the
business? Identify several things that are more likely to have a nega-
tive effect on a restaurant than on other types of businesses.

MAKE CONNECTIONS

22. Teamwork Assume you are the credit manager of a major retail store.
A customer of several years, who has an excellent credit background,
now has a $4,600 unpaid balance. The customer has made no pay-
ments in several months. You learn from your credit bureau that she
is not currently behind on other accounts but the credit balances on
all her accounts are increasing. She recently lost her job. Form a team
of three students to propose three realistic ways you, as the credit
manager, might handle this customer. Which of the options would
result in a collection and maintain the customer’s goodwill?
23. Research Find an Internet site that provides quotes for life insurance.
Determine what a $100,000 term life insurance policy would cost
for a male, 45 years of age. Then determine the cost for the same
amount of insurance for a female of the same age. Report the costs
of insurance from three insurance companies. Present your results
in a table. If the costs differ for the companies and for males and
females, identify possible reasons for those differences.
24. Technology Use a computer spreadsheet program and the following
information on unpaid purchases to prepare a credit report dated
November 30 on the accounts receivable for a business that offers
30-day credit terms. The report should contain an aging of accounts
receivable, similar to the one shown in Figure 18-4, and the percent-
age of delinquent accounts in relation to the total accounts receivable.

Sykes purchased $600 on November 15.
Sanford purchased $1,500 on November 19.
Jenkins purchased $2,100 on November 12.
Sanchez purchased $900 on October 17.
Godowski purchased $600 on October 10.
Yamamoto purchased $300 on September 25.

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