If a Principal Authorizes an Agent to Buy a Tractor

question 41

Multiple Choice

If a principal authorizes an agent to buy a tractor for $10,000, this is an example of

• A) certain authority.
• B) express authority.
• C) incidental authority.
• D) apparent authority

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Definitions:

Fixed Cost

Fixed cost refers to a cost that does not change with the level of output or sales in the short term, such as rent, salaries, or loan payments.

Sunk Cost

Costs that have already been incurred and cannot be recovered or altered.

Incremental Revenues

Additional income received from a particular action or decision, beyond what would have been received without it.

Direct Material

Raw materials that are directly traceable and allocable to the production of goods or services.