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Leases and Ethical Dilemmas

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When Tiffany's boyfriend, Paul, unexpectedly lost his roommate and could no longer afford to live in his apartment, he moved in with Tiffany. her lease did not allow anyone who was not on the lease to occupy the premises. The landlord was not on the premises, so she was not worried about it being discovered. Her neighbor on the left, Tyra, is really incensed about Byron moving in with Tiffany. Tyra's best friend is Tiffany's neighbor on the right, Preston. When the same thing happened to Preston's girlfriend, Preston did not let her live with him because of the lease prohibition. Tyra is thinking seriously about whether to tell the landlord that Tiffany has an unauthorized person living with her.
1. Discuss the ethics of Tiffany's actions and whether Tyra should tell. "It's none of her business" is not an option.
2. Discuss Tiffany's situation as an ethical issue.
3. Who are the stakeholders?
4. What do they stand to lose by Tiffany's situation? What do they stand to gain?
5. Is it a form of stealing?
6. Is there a public policy at play?
7. Does it have monetary implications?
8. For whom? Think broadly.

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1. Discuss the ethics of Tiffany's actions and whether Tyra should tell. "It's none of her business" is not an option.

The ethics of telling are based upon how the person will be affected if he is subsequently "kicked" out the apartment because of Tyra's actions. This person will face potential homelessness because of her decision to tell, which in reality is vindictive more than anything because she feels slighted by the fact that her friend couldn't or didn't move in a boyfriend because of lease restrictions. Not telling on the person wouldn't affect Trya's life in a negative way nor would telling on him improve her lot or cause anything other than potential pain for the person. Therefore, the only way she could ethically feel good about telling would be to adhere to the rules and guidelines in a strictly interpreted way, which is good in some cases ...

Solution Summary

This solution discusses various ethical issues regarding leases.

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Question on Leasehold improvements: Ethics Case

American Movieplex, a large movie theater chain, leases most of its theater facilities. In conjunction with recent operating leases, the company spent $28 million for seats and carpeting. The question being discussed over breakfast on Wednesday morning was the length of the depreciation period for these leasehold improvements. The company controller, Sarah Keene, was surprised by the suggestion of Larry Person, her new assistant.

Keene: Why 25 years? We've never depreciated leasehold improvements for such a long period.
Person: I noticed that in my review of back records. But during our expansion to the Midwest, we don't need expenses to be any higher than necessary.
Keene: But isn't that a pretty rosy estimate of these assets' actual life? Trade publications show an average depreciation period of 12 years.

Questions I need help with: Any help would be greatly appreciated.
1. How would increasing the depreciation period affect American Movieplex's income?
2. Does revising the estimate pose an ethical dilemma?
3. Who would be affected if Person's suggestion is followed?

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