Chapter 1, Problem 1SC

To determine

Concept Introduction

Fraud is an intentional act done to deceive a person. Losses incurred from fraud reduces a firm’s income on a dollar-for-dollar basis. For every $1 of fraud, $1 of net income is reduced and it significantly takes more revenue to recover such loss.

The relationship can be written as $Additional\text{ Revenue =}\frac{\text{Fraud Loss}}{\text{Profit margin}}$

Part 1:

To determine the value of additional revenue each company must generate to recover from fraud loss