Amos Has Purchased a Discontinued Radio Clock from the Local

question 7

Multiple Choice

Amos has purchased a discontinued radio clock from the local discount electronics outlet.Upon arriving home,he notices that the timer is not functional.He wonders if he could legally demand his money back and consults you.You tell him that

• A)sellers are strictly liable for what they sell,so simply bring it back for a refund.
• B)there is an implied condition that the goods will be of "merchantable quality."
• C)since the item was discontinued,all sales are final,and the store does not need to return his money.
• D)title has not passed until the seller has "put item into a deliverable state."
• E)he should first consult the bill of sale for any exemption clauses.

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Definitions:

Contribution Margin

The difference between sales revenue and variable costs, indicating how much revenue contributes to covering fixed costs and profit generation.

Fixed Costs

Expenses that do not vary with the level of production or sales, such as rent, salaries, and insurance.

Operating Income

Earnings before interest and taxes (EBIT), a measure of a company's profitability from its core operations.