Caveat Emptor,which Means "Let the Buyer Beware," Functions to Limit

question 56

Multiple Choice

Caveat emptor,which means "let the buyer beware," functions to limit the liability of sellers.However,it is not a rigid rule.An situation in which a seller would NOT be able to use this defence would be if

• A)the goods are in existence and are specific items that may be inspected by the buyer.
• B)the buyer had every opportunity to inspect the goods.
• C)the seller appeared to be knowledgeable about the product.
• D)the seller made no misrepresentation concerning the goods.
• E)the seller has made misrepresentations about the goods.

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Definitions:

Cash Flows

Cash flows are the net amount of cash and cash-equivalents being transferred into and out of a business.

Required Return

The minimum expected return on an investment, necessary to compensate for the risk taken by the investor.

IRR

The Internal Rate of Return (IRR) is a financial metric used to estimate the profitability of potential investments. It is the discount rate that makes the net present value of all cash flows from a particular project equal to zero.

Cash Flows

The complete aggregate of monetary circulation into and out of a company, crucially influencing its quick assets.