ABC Company Manufactures a Contraption Meant to Enable a Rider

question 13

Multiple Choice

ABC Company manufactures a contraption meant to enable a rider to fly behind a ski boat.After a few months,ABC begins to hear of injuries when riders crash into water or boats.In hopes of escaping liability,the president of ABC Company decides to discontinue business and sell all assets to XYZ Company.The president of XYZ Company is excited to purchase the assets at a bargain price and help ABC avoid liability based upon the assertion of the president of ABC that XYZ cannot legally be held liable for the flying accidents.Which of the following is true in a majority of states applying the traditional successor liability rule?

• A) XYZ Company will not be held liable for the accidents so long as there is no contractual agreement by which it agrees to accept liability.
• B) XYZ Company will only be held liable if it continues to manufacture the same product lines as ABC.
• C) XYZ Company will only be held liable if it keeps the same tax number as ABC Company.
• D) XYZ Company will likely be held liable for the accidents based upon the transaction being entered into wrongfully in order for ABC Company to escape liability.

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Definitions:

Safety Regulations

Rules and guidelines developed to protect the health and well-being of individuals, often enforced by governing bodies.

Environmental Regulations

Are legal provisions and standards aimed at protecting the environment by controlling pollution and ensuring sustainable use of natural resources.

Inventory Carrying Cost

The total expenses associated with holding and storing unsold goods, including warehousing, insurance, depreciation, and opportunity costs.

Annual Requirement

The total quantity or amount of a particular resource or input that is needed by an organization or project over the course of a year.