Before buying a house, dean and donna testa hired ground systems, inc. (gsi), to inspect and describe the sewage and water disposal system. gsi reported that a split sewage and water disposal system was in place with a watertight septic tank, a wastewater tank, a distribution box, and a leach field. the testas bought the house. later, dean testa noticed that the system was not as gsi described; there was no distribution box or leach field. furthermore, there was only one tank, and the tank was not watertight. the testas arranged for the installation of a new system and sold the house. assuming that gsi is liable for a breach of contract, what is the measure of damages?

Fanning company is considering the addition of a new product to its cosmetics line. the company has three distinctly different options: a skin cream, a bath oil, or a hair coloring gel. relevant information and budgeted annual income statements for each of the products follow. skin cream bath oil color gel budgeted sales in units (a) 110,000 190,000 70,000 expected sales price (b) $8 $4 $11 variable costs per unit (c) $2 $2 $7 income statements sales revenue (a × b) $880,000 $760,000 $770,000 variable costs (a × c) (220,000) (380,000) (490,000) contribution margin 660,000 380,000 280,000 fixed costs (432,000) (240,000) (76,000) net income $228,000 $140,000 $204,000 required: (a) determine the margin of safety as a percentage for each product. (b) prepare revised income statements for each product, assuming a 20 percent increase in the budgeted sales volume. (c) for each product, determine the percentage change in net income that results from the 20 percent increase in sales. (d) assuming that management is pessimistic and risk averse, which product should the company add to its cosmetics line? (e) assuming that management is optimistic and risk aggressive, which product should the company add to its cosmetics line?