Ron Operates a Garbage Pickup Business

question 45

Multiple Choice

Ron operates a garbage pickup business.He contracts to pick up garbage from an apartment complex for the next 52 weeks at a price of $50 per week.Unexpectedly,the landfill center where Ron takes the garbage to dispose of it,files for bankruptcy.As a result,Ron must travel an additional 100 miles to the nearest landfill center,turning Ron's expected profit into a loss of $15 per week.Ron's best argument in support of his petition to be discharged from the contract is:

• A) the mail box rule.
• B) commercial impracticability.
• C) frustration of purpose.
• D) true impossibility.

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Definitions:

Holding-Period Return

The total return received from holding an asset or portfolio of assets over a period, typically expressed as a percentage.

Effective (Annualized) Yield

A calculation of the annual return on an investment, taking into account the effect of compounding interest.

Consumer Price Index

An index that measures the average change over time in the prices paid by urban consumers for a market basket of consumer goods and services.

Effective Annualized Rate

The interest rate on an investment or loan on an annual basis, taking compounding into account.