Which One of the Following Is an Example of a Flexibility

question 18

Multiple Choice

Which one of the following is an example of a flexibility option?

• A)A company has an option to invest in a project today or to wait a year.
• B)A company has an option to close down an operation if it turns out to be unprofitable.
• C)A company agrees to pay more to build a plant in order to be able to change the plant's inputs and/or outputs at a later date if conditions change.
• D)A company invests in a project today to gain knowledge that may enable it to expand into different markets at a later date.

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Definitions:

Agent's Clause

A provision in a contract specifying the authority and scope of the relationship between an agent and the principal they represent.

Apparent Authority

The appearance or assumption of authority based on the actions or statements of a principal, leading others to believe a person has the right to act on the principal’s behalf.

Undisclosed Principal

A legal term referring to a situation where an agent acts on behalf of a principal, but the identity of the principal is not revealed to the third party involved in the transaction.

Formalities

Specific procedures, requirements or conditions that are mandated by law or established practice.