Which of the Following Is True for a Buyer with an Output

question 3

Multiple Choice

Which of the following is true for a buyer with an output contract?

• A)The buyer cannot sue the seller in case the seller plans to share its output with another buyer.
• B)The buyer can choose to buy when and what he wants from the seller.
• C)The buyer is obliged to buy all the goods sold from the seller.
• D)The buyer cannot enforce the best-efforts clause in the output contract.

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Definitions:

Working Capital

The difference between a company's current assets and current liabilities, indicating short-term financial health.

Acid-test Ratio

A financial metric that measures a company's ability to cover its short-term liabilities with its most liquid assets.

Debt-to-equity Ratio

This proportion demonstrates the relative use of debt and shareholders' equity in the capital funding of a company's assets.

Receivable Turnover

A financial metric indicating how efficiently a company collects cash from credit sales by measuring the number of times average accounts receivable are collected over a period.