The Effect of the Doctrine of Privity of Contract Is

question 39

Multiple Choice

The effect of the doctrine of privity of contract is that

• A) parties to a contract are protected by the law.
• B) a person can obtain rights under a contract to which he is not a party.
• C) a bilateral contract is unenforceable against a promisee.
• D) a person who is not a party to a contract cannot obtain benefits or rights under it.
• E) a unilateral contract is unenforceable against parties who have privity.

Understand how depreciation impacts cash flow and investment analysis.

Calculate and understand the significance of the cash payback method in capital budgeting.

Understand the concept of payback period and how it is calculated.

Know the differences between net present value and average rate of return methods of capital investment analysis.

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Definitions:

Flexible Overhead Budget

A budget that adjusts overhead costs based on changes in activity levels or other factors, allowing for more accurate cost management.

Standard Input Measure

A benchmark for the amount of resources (materials, labor, and overhead) expected to be consumed in producing goods or services.

Direct Labour Hours

The total hours worked by employees directly involved in the production process of goods or delivery of services.

Machine Hours

A measure of production time, quantified in hours, that machinery is operational and actively working on manufacturing products.