Operations are compliant to current environmental laws

Assignment Help Financial Management

Reference no: EM131945337

Cero Inc. is an oil and gas company that operates in the nation of Lumnia. Cero has incurred unforeseen expenses this year because of an environmental lawsuit filed against the company for accidentally causing an oil spill in a marine area in Lumnia. Therefore, despite Cero’s earnings being high, the company’s net income is much lower than what the company anticipated.

CFO of Cero Inc.: Our operations are compliant to the current environmental laws. Accidents such as the oil spill caused by Cero Inc. are extremely rare. Therefore, the consequences of the environmental impacts of our operations should be categorized as nonrecurring costs in our financial statements.

Cero’s shareholder: Cero Inc.’s earnings steadily increase every year. Since the oil spill is a onetime incident, there is no need to worry about its impact on next year’s profits.

Which of the following statements, if true, weakens the CFO’s argument?

Reference no: EM131945337

Questions Cloud

What was your capital gain : What was your capital gain? The dividend yield was %

What is the net annual cash flow : The equipment has a five-year life and an estimated salvage value of $50,000. What is the net annual cash flow

How is time management an example of reaping what we sow : As you review your time chart, what changes will you need to make to be successful in your schoolwork? If you do not see the need for change, explain why.

Write the null and alternative hypotheses for test : a. Write the null and alternative hypotheses for this test:

Operations are compliant to current environmental laws : CFO of Cero Inc.: Our operations are compliant to the current environmental laws

Describe the sources of team conflict : Describe the Sources of Team Conflict and Describe the 5 principles of Lean - Which of the following tools are used to get the shape of the distribution

How you rate as a disease detective based on points earned : Identify the outbreak you had chosen to solve. Discussed how you rate as a disease detective based on points earned in the game?

What amount of revenue should indigo cellular recognize : Students may renew the service for each year they are on campus, What amount of revenue should Indigo Cellular recognize in the first year of the contract

What will be optimal cash return point : HotFoot Shoes would like to maintain its cash account at a minimum level of $39,000, What will be its optimal cash return point?

User Account

All Pages