See, Inc. is an American corporation that sells eyewear over the Internet on its Web site, seeeyewear.com, which it registered as a domain name in 1998. See, Inc. owns federal trademarks on SEE and SEE SELECTIVE EYEWEAR ELEMENTS. See, Inc. has also filed for a trademark on SEE EYEWEAR. The Defendant, Imago Eyewear Party, Ltd., is an Australian company that also sells eyewear over the Internet. Imago uses the Web site “seeyewear.com” to sell its products. This Web site domain name was registered in 2002. Image has filed for a United States trademark on SEEYEWEAR. See, Inc. sued Imago Eyewear in Michigan Federal Court. See, Inc. claimed that Imago, by using the Web site seeyewear.com, had violated Federal trademark law and Michigan’s unfair trade practices statutes. Imago argued that there is no jurisdiction for See, Inc. to sue in Michigan. Imago argued that See, Inc. is an Australian corporation and that, although Michigan residents can access its Web site on the Internet, no Michigan resident has every contacted See, Inc. via its Web site. Therefore, a U.S. Court does not have jurisdiction to hear this case. Source: See, Inc. v. Imago Eyewear Party, Ltd., 167 Fed.Appx. 518 (6th Cir. 2006)

Can See, Inc. sue Imago Eyewear in Michigan?

General Electric Capital, a division of General Electric, uses long-term debt extensively. In a recent year, GE Capital issued $11 billion in long-term debt to investors, then within days filed legal documents to prepare for another$50 billion long-term debt issue. As a result of the $50 billion filing, the price of the initial$11 billion offering declined (due to higher risk of more debt).

Bill Gross, a manager of a bond investment fund, “denounced a ‘lack in candor’ related to GE’s recent debt deal. ‘It was the most recent and most egregious example of how bondholders are mistreated.’ Gross argued that GE was not forthright when GE Capital recently issued $11 billion in bonds, one of the largest issues ever from a U.S. corporation. What bothered Gross is that three days after the issue the company announced its intention to sell as much as$50 billion in additional debt, warrants, preferred stock, guarantees, letters of credit and promissory notes at some future date.”

In your opinion, did GE Capital act unethically by selling $11 billion of long-term debt without telling those investors that a few days later it would be filing documents to prepare for another$50 billion debt offering?

Source: Jennifer Ablan, “Gross Shakes the Bond Market; GE Calms It, a Bit,” Barron’s,March 25, 2002.

In June 1995, Michael and Debra Boudreaux, doing business as D&J Enterprises, Inc., bought a retail electronics store operated under a franchise from Radio Shack. ey borrowed from Cabool State Bank to pay for the business and signed loan documents and a nancing statement, which identied them as “Debtors.” Elsewhere on the nancing statement, the bank identied “D&J Enterprises, Inc., Radio Shack, Dealer, Debra K. Boudreaux, Michael C. Boudreaux” as “Debtors.” e statement covered, in part, the store inventory. Before the end of the year, Michael and Debra changed the name of their business to Tri-B Enterprises, Inc. In January 1998, the store closed. The next month, Radio Shack terminated the franchise. Despite the lack of a security interest, Radio Shack took possession of the inventory, claiming that the couple and Tri-B owed the company $6,394.73. The bank filed a suit in a Missouri state court against Radio Shack, claiming a perfected security interest in the inventory with priority over Radio Shack’s claim. Did the bank’s security interest take priority over Radio Shack’s claim? Why or why not? [Cabool State Bank v. Radio Shack, 65 S.W.3d 613 (Mo. App. 2002)]

On behalf of BRJM, LLC, Nicolas Kepple offered Howard Engelsen $\$210,000$ for a parcel of land known as lot five on the north side of Barnes Road in Stonington, Connecticut. Engelsen’s company, Output Systems, Inc., owned the land. Engelsen had the lot surveyed and obtained an appraisal. The appraiser determined that the property was 3.0 acres in size. It thus could not be subdivided because it did not Copyright 2018 Cengage Learning. All Rights Reserved. May not be copied, scanned, or duplicated, in whole or in part. WCN 02-200-202 294 UNIT THREE Contracts and E-Contracts meet the town’s minimum legal requirement of 3.7 acres for subdivision. The appraiser then valued the property at $\$277,000$. Engelsen responded to Kepple’s offer of $\$210,000$ with a counteroffer of $\$230,000$, which Kepple accepted. On May 3, 2002, the parties signed a contract. When Engelsen refused to go through with the deal, BRJM filed a suit in a Connecticut state court against Output, seeking specific performance and other relief. The defendant asserted the defense of mutual mistake on at least two grounds. [BRJM, LLC v. Output Systems, Inc., 100 Conn. App. 153, 917 A.2d 605 (2007)] (See Mistakes.)

(b) After signing the contract, Engelsen obtained a second appraisal that established the size of lot five as 3.71 acres, which meant that it could be subdivided, and valued the property at $\$490,000$. Can the defendant avoid the contract on the basis of a mistake in the first appraisal? Explain.

The number of revenue passengers enplaned in the United States per year from 1996 to 2016 are shown in Table.

$$\begin{matrix} \text{Year} & \text{Passengers} & \text{Year} & \text{Passengers} & \text{Year} & \text{Passengers}\\ \text{ } & \text{(millions)} & \text{ } & \text{(millions)} & \text{ } & \text{(millions)}\\ \text{1996} & \text{581.2} & \text{2003} & \text{647.5} & \text{2010} & \text{720.5}\\ \text{1997} & \text{594.7} & \text{2004} & \text{703.7} & \text{2011} & \text{730.8}\\ \text{1998} & \text{612.9} & \text{2005} & \text{738.6} & \text{2012} & \text{736.7}\\ \text{1999} & \text{636.0} & \text{2006} & \text{744.7} & \text{2013} & \text{743.2}\\ \text{2000} & \text{666.1} & \text{2007} & \text{769.6} & \text{2014} & \text{762.7}\\ \text{2001} & \text{622.1} & \text{2008} & \text{743.3} & \text{2015} & \text{798.2}\\ \text{2002} & \text{614.3} & \text{2009} & \text{703.9} & \text{2016} & \text{823.0}\\ \end{matrix}$$

Write the equation for the line with slope 17 passing through the point (6, 581.2) and superimpose it on The scatter plot What happened in 2001 and 2008 to disrupt the model of linear growth?

(a) In Excel, convert each time-series variable into index numbers (1990 = 100). (b) What is the 2004 index value for each time series? What does this tell you? (c) Plot all four series of index numbers on the same graph. Describe what you see. (d) What is the advantage of using index numbers in plotting and comparing these data over time?

$$\begin{aligned} &\text { U.S. Adults on Probation, in Jail or Prison, or on Parole, 1990-2004 (thousands) }\\ &\begin{array}{ccccc} \hline \text { Year } & \text { Probation } & \text { Jail } & \text { Prison } & \text { Parole } \\ \hline 1990 & 2,670 & 403 & 743 & 531 \\ 1991 & 2,728 & 424 & 793 & 590 \\ 1992 & 2,812 & 442 & 851 & 659 \\ 1993 & 2,903 & 456 & 909 & 676 \\ 1994 & 2,981 & 480 & 990 & 690 \\ 1995 & 3,078 & 507 & 1,079 & 679 \\ 1996 & 3,165 & 510 & 1,128 & 680 \\ 1997 & 3,297 & 558 & 1,177 & 695 \\ 1998 & 3,670 & 584 & 1,224 & 696 \\ 1999 & 3,780 & 596 & 1,287 & 714 \\ 2000 & 3,826 & 621 & 1,316 & 724 \\ 2001 & 3,932 & 631 & 1,330 & 732 \\ 2002 & 4,024 & 665 & 1,368 & 751 \\ 2003 & 4,145 & 691 & 1,393 & 745 \\ 2004 & 4,151 & 714 & 1,422 & 765 \end{array} \end{aligned}$$

The following table presents the numbers of male and female students (in thousands) enrolled in college in the United States as undergraduates for each of the years $1997$ through $2016$.

$$\begin{array}{cccccr} \hline \text{Year} & \text{Male} & \text{Female} \hspace{25pt} & \text{Year} & \text{Male} & \text{Female}\\ \hline 1997 & 5469 & 6982 \hspace{25pt} & 2007 & 6728 & 8876\\ 1998 & 5446 & 6991 \hspace{25pt} & 2008 & 7067 & 9299\\ 1999 & 5559 & 7122 \hspace{25pt} & 2009 & 7563 & 9901\\ 2000 & 5778 & 7377 \hspace{25pt} & 2010 & 7836 & 10246\\ 2001& 6004 & 7711 \hspace{25pt} & 2011 & 7823 & 10254\\ 2002 & 6192 & 8065 \hspace{25pt} & 2012 & 7715 & 10021\\ 2003 & 6227 & 8253 \hspace{25pt} & 2013 & 7660 & 9815\\ 2004 & 6340 & 8441 \hspace{25pt} & 2014 & 7586 & 9707\\ 2005 & 6409 & 8555 \hspace{25pt} & 2015 & 7499 & 9799\\ 2006 & 6514 & 8671 \hspace{25pt} & 2016 & 7528 & 9962\\ \hline \end{array}$$

$\textbf{a.}\hspace{10pt}$ Construct a time-series plot for the male enrollment; then on the same axes, construct a time-series plot for the female enrollment

$\textbf{b.}\hspace{10pt}$ Which is growing faster, male enrollment or female enrollment?

The table below gives the average daily volume (number of shares traded) on the New York Stock Exchange (NYSE) for the years 1985-2005.

a. On the interval from 1993 to 1998, is the rate of change of average daily volume increasing, decreasing, or constant?

b. Between which two years does it appear that the average daily volume changed the most?

$$\begin{array}{|c|c|} \hline \text { Year } & \begin{array}{c} \text { Average Daily } \\ \text { Volume (mil) } \end{array} \\ \hline 1985 & 109.2 \\ \hline 1986 & 141.0 \\ \hline 1987 & 188.9 \\ \hline 1988 & 161.5 \\ \hline 1989 & 165.5 \\ \hline 1990 & 156.8 \\ \hline 1991 & 178.9 \\ \hline 1992 & 202.3 \\ \hline 1993 & 264.5 \\ \hline 1994 & 291.4 \\ \hline 1995 & 346.1 \\ \hline \end{array}$$

$$\begin{array}{|c|c|} \hline \text { Year } & \begin{array}{c} \text { Average Daily } \\ \text { Volume (mil) } \end{array} \\ \hline 1996 & 412.0 \\ \hline 1997 & 526.9 \\ \hline 1998 & 673.6 \\ \hline 1999 & 808.9 \\ \hline 2000 & 1041.6 \\ \hline 2001 & 1240.0 \\ \hline 2002 & 1441.0 \\ \hline 2003 & 1398.4 \\ \hline 2004 & 1456.7 \\ \hline 2005 & 1602.2 \\ \hline \end{array}$$

Burger King introduced a meat-free burger in 2002. The nutrition label for the 2014 BK Veggie burger (no mayo) is shown here:

$$\begin{array}{l} \begin{array}{l} \text{Nutrition Facts} \end{array} \\ \begin{array}{lr} \text { Calories } & 320 \\ \hline \text { Fat } & 8 \mathrm{~g} \\ \hline \text { Sodium } & 840 \mathrm{~g} \\ \hline \text { Sugars } & 9 \mathrm{~g} \\ \hline \text { Protein } & 21 \mathrm{~g} \\ \hline \text { Carbohydrates } & 42 \mathrm{~g} \\ \hline \text { Dietary Fiber } & 4 \mathrm{~g} \\ \hline \text { Cholesterol } & 0 \\ \hline \end{array} \\ \begin{array}{r} \text{*(1 gram of saturated fat)} \end{array}\\ \hline \begin{array}{l} \text{Recommended Daily Values}\\ \text{(based 0n a 2,000-calorie/day diet)} \end{array} \\ \begin{array}{lr} \text{Iron} & 0\%\\ \text{Vitamin A} & 0\%\\ \text{Vitamin C} & 0\%\\ \text{Calcium} & 0\% \end{array} \end{array}$$

Write a brief report about the Fat and Protein content of this menu item. Be sure to talk about the variables by name and in the correct units.

(a) Use MegaStat or MINITAB to perform a regression using seasonal binaries. Interpret the results. (b) Make monthly forecasts for 2006. If you can find data on the Web, check your forecasts.

$$\begin{aligned} &\text { Student Pilot Certificates Issued by Month, 2000-2005 }\\ &\begin{array}{lllllll} \hline \text { Month } & 2000 & 2001 & 2002 & 2003 & 2004 & \mathbf{2 0 0 5} \\ \hline \text { Jan } & 4,248 & 4,747 & 5,346 & 4,954 & 4,883 & 4,234 \\ \text { Feb } & 3,824 & 4,317 & 4,114 & 4,602 & 4,442 & 5,846 \\ \text { Mar } & 4,687 & 4,853 & 4,306 & 4,897 & 5,273 & 5,063 \\ \text { Apr } & 4,486 & 4,616 & 4,294 & 5,313 & 4,584 & 4,001 \\ \text { May } & 4,706 & 4,613 & 4,982 & 5,196 & 5,644 & 4,697 \\ \text { Jun } & 5,509 & 5,485 & 5,531 & 6,197 & 6,560 & 5,182 \\ \text { Jul } & 5,306 & 6,130 & 6,046 & 7,151 & 6,560 & 5,037 \\ \text { Aug } & 6,284 & 6,145 & 6,216 & 7,278 & 7,355 & 6,401 \\ \text { Sep } & 4,698 & 5,524 & 5,592 & 6,204 & 4,643 & 5,216 \\ \text { Oct } & 3,985 & 4,800 & 5,201 & 5,621 & 5,029 & 4,958 \\ \text { Nov } & 3,443 & 4,353 & 3,818 & 4,287 & 4,095 & 4,130 \\ \text { Dec } & 2,400 & 2,779 & 2,990 & 3,721 & 2,771 & 3,277 \end{array} \end{aligned}$$

In January 2012, the New York Times published a story called Twin Births in the U.S., Like Never Before, in which they reported a 76 percent increase in the rate of twin births from 1980 to 2009. Here are the number of twin births each year (per 1000 live births).

$$\begin{array}{c|c|c|c} \text { Year } & \begin{array}{c} \text { Twin Birth } \\ \text { (per 1000 } \\ \text { live births) } \end{array} & \text { Year } & \begin{array}{c} \text { Twin Birth } \\ \text { (per 1000 } \\ \text { live births) } \end{array} \\ \hline 1980 & 18.92 & 1998 & 28.08 \\ 1981 & 19.21 & 1999 & 28.87 \\ 1982 & 19.46 & 2000 & 29.30 \\ 1983 & 19.86 & 2001 & 30.12 \\ 1984 & 19.88 & 2002 & 31.11 \\ 1985 & 20.50 & 2003 & 31.46 \\ 1986 & 21.30 & 2004 & 32.15 \\ 1987 & 21.36 & 2005 & 32.17 \\ 1988 & 21.80 & 2006 & 32.11 \\ 1989 & 22.41 & 2007 & 32.19 \\ 1990 & 22.46 & 2008 & 32.62 \\ 1991 & 23.05 & 2009 & 33.22 \\ 1992 & 23.35 & 2010 & 33.15 \\ 1993 & 23.88 & 2011 & 33.20 \\ 1994 & 24.39 & 2012 & 33.15 \\ 1995 & 24.86 & 2013 & 33.7 \\ 1996 & 25.84 & 2014 & 33.9 \\ 1997 & 26.83 & & \end{array}$$

Explain in this context what the slope means.

Assume that Carla Harris of Morgan Stanley has impressed you with the company's success and its commitment to ethical behavior. You learn of a staff opening at Morgan Stanley and decide to apply for it. Your resume is successfully screened from those received and you advance to the interview process. You learn that the interview consists of analyzing the following financial facts and answering analysis questions below. (The data are taken from a small merchandiser in outdoor recreational equipment.)

Required

Use these data to answer each of the following questions with explanations.

1. Is it becoming easier for the company to meet its current liabilities on time and to take advantage of any available cash discounts? Explain.
2. Is the company collecting its accounts receivable more rapidly? Explain.
3. Is the company's investment in accounts receivable decreasing? Explain.
4. ls the company's investment in plant assets increasing? Explain.
5. Is the owner's investment becoming more profitable? Explain.
6. Did the dollar amount of selling expenses decrease during the three-year period? Explain.

The law firm of Clark and Lankau accumulates costs associated with individual cases, using a job order cost system. The following transactions occurred during May:

May 2.   Charged 200 hours of professional (lawyer) time to the Peterson Co. breech of               contract suit to prepare for the trial, at a rate of $140 per hour.         7.   Reimbursed travel costs to employees for depositions related to the Peterson case,$14,600.       11.   Charged 300 hours of professional time for the Peterson trial at a rate of $175 per hour.       16.   Received invoice from consultants Davis and Harris for$40,000 for expert testimony related to the Peterson trial.       21.   Applied office overhead at a rate of $50 per professional hour charged to the Peterson case.       31.   Paid secretarial and administrative salaries of$26,000 for the month.       31    Used office supplies for the month, $6,000.       31.   Paid professional salaries of$38,640 for the month.       31.   Billed Peterson $185,000 for successful defense of the case.

a. Provide the journal entries for each of the above transactions.

Five students from your school who graduated two years ago are in a band. They just cut a CD and began selling it. You love the music and buy a copy. Your two closest friends also love the music and ask you to make copies of the CD for them. Is it ethical for you to copy this CD and give it to other people? Explain your position.