Business Case Studies & Business Publications

Vincent Buys a Lawn Mower

Fairchild, Gregory...

Case

Vincent Buys a Lawn Mower

Fairchild, Gregory B.; Maiden, Stephen E.

F-1794 | Published January 8, 2019 | 7 pages Case

Collection: Darden School of Business

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Vincent Chin's first "temporary" job after high school was with the lawn crew of Holiday Lawn Service. Ten years later, Chin has become a trusted employee and the company's second-in-command. His boss, Sam Holiday, has decided to retire and has worked out a deal with Chin to take over the business. In preparing Chin for his new role, Holiday explains that there are important choices ahead related to capital expenditures (like lawn mowers) and their depreciation. Although Chin is determined to build on the company's success, accounting sometimes confused him, and the mention of terms like taxes and cash flow always intimidated him. Can Holiday help his successor better understand the links among accelerated depreciation, maintenance expense, salvage value, and tax liabilities to ensure that he's ready for his new business responsibilities?