Comment on the Following Statement: "If the Firm Owns the Funds

question 145

Essay

Comment on the following statement: "If the firm owns the funds it uses to purchase investment goods, then the annual cost of investing is zero and we should invest in any project where the annual return net of inflation is greater than zero."

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Definitions:

Express Warranty

A written or verbal promise made by a seller to a buyer, guaranteeing the quality or functionality of a product or service.

Merchantability

A guarantee that a product will meet reasonable expectations of quality and usability for which it was sold.

Nonconforming Goods

Goods shipped that do not meet the specifications or requirements set out in the contract of sale.

Reasonable Notice

The notification given within a reasonable time frame to allow individuals or parties to prepare or respond to changes or actions.