What is a best-efforts contract?
What will be an ideal response?
A best-efforts contract is a contract that contains a clause that requires one or both of the parties to use their best efforts to achieve the objective of the contract. The courts generally have held that the imposition of the best-efforts duty provides sufficient consideration to make a contract enforceable. A party can sue another company for failing to use its promised best efforts.
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Merckle Corporation owns 40 percent of the voting stock of Grant Corporation and accounts for the investment using the equity method; Grant Corporation reports a net loss of $30,000. Merckle Corporation's entry to record the share of loss is:
A) Loss, Grant Corporation Investment 12,000Investment in Grant Corporation 12,000 B) Investment in Grant Corporation 12,000Loss, Grant Corporation Investment 12,000 C) Investment in Grant Corporation 30,000Cash 30,000 D) Investment in Grant Corporation 12,000Cash 12,000
Identify the five steps involved in managerial decision-making.
What will be an ideal response?
Which of the following statements is CORRECT?
A. An example of an externality is a situation where a bank opens a new office, and that new office causes deposits in the bank's other offices to decline. B. The NPV method automatically deals correctly with externalities, even if the externalities are not specifically identified, but the IRR method does not. This is another reason to favor the NPV. C. Both the NPV and IRR methods deal correctly with externalities, even if the externalities are not specifically identified. However, the payback method does not. D. Identifying an externality can never lead to an increase in the calculated NPV. E. An externality is a situation where a project would have an adverse effect on some other part of the firm's overall operations. If the project would have a favorable effect on other operations, then this is not an externality.
Risks ordinarily assumed in business constitute consideration for the modification of a contract
Indicate whether the statement is true or false